# Japan and Korea: payment and crypto licences

> Licensing in Japan and South Korea: the three funds transfer tiers and the empty third one, prepaid issuer thresholds, electronic payment instruments and the JPYC and JPYSC stablecoins, crypto moving into FIEA, Korea's VAUPA, EFTA capital ladder and real-name bank account gate, foreign entry routes and 2024–2026 enforcement.

Author: Maria Plotnikova — Lawyer, Family Office (https://wiki.private.law/en/authors/plotnikova)
Last modified: 2026-08-21T15:13:00.000Z
Canonical: https://wiki.private.law/en/japan-korea-fintech-licenses
Topics: banking
Jurisdictions: global
Product tags: crypto, stablecoin, compliance, banking, custody
Semantic tags: crypto, stablecoin, compliance, banking, custody

---

Japan and Korea are the two largest financial markets in Asia that almost never appear on licence-shopping shortlists, and they are absent for opposite reasons. Japan has run the most granular non-bank payments statute in the region since 2010, with public registers that name every licensee and the exact permission it holds; entry is cheap in capital terms, but the regulator counts every yen of client money. Korea looks cheaper on paper, yet the real gatekeeper is a commercial bank rather than the regulator: without a real-name deposit and withdrawal account at a Korean bank, an exchange licence buys almost nothing.

The registers tell the story better than any statute summary. As of 31 July 2026 Japan had [84 registered funds transfer service providers](https://www.fsa.go.jp/menkyo/menkyoj/shikin_idou.pdf), 792 third-party-type and 1,228 own-issuer-type prepaid instrument issuers; as of 30 June, [26 crypto asset exchange service providers](https://www.fsa.go.jp/menkyo/menkyoj/kasoutuka.pdf); as of 24 June, [exactly one electronic payment instruments service provider](https://www.fsa.go.jp/menkyo/menkyoj/denshikessaisyudan.pdf). Korea began 2026 with 27 registered virtual asset service providers, down from the 29 in the original December 2021 cohort, and only five of them operate a won market.

How the two stablecoin regimes compare with Hong Kong and Singapore is covered in the [Asian regimes survey](https://wiki.private.law/en/asia-stablecoin-regimes). This page is about licensing mechanics: which permissions exist, what thresholds sit inside them, how many licensees are actually on the register, and what happens when a foreign group tries to walk in.

## Moving money in Japan: three tiers, two of which are used

Non-bank remittance in Japan is 資金移動業, a registered activity under Chapter 3 of the Payment Services Act \(Act No. 59 of 2009\). Since 1 May 2021 the regime has been split into three tiers by the size of a single transfer. [Article 36-2 of the Act](https://laws.e-gov.go.jp/law/421AC0000000059) sets the definitions and Article 12-2 of the enforcement order sets the numbers: Type II covers transfers of up to ¥1 million, Type III up to ¥50,000, and Type I is everything else, meaning no ceiling at all.

The FSA register shows something no regime summary does. Of the 84 providers on the register at 31 July 2026, **83 hold Type II, eight hold Type I and none holds Type III**. The tier designed as the cheapest on-ramp for small payments has not attracted a single registrant in five years. That is despite having the softest financial regime of the three: under Article 14 of the enforcement order the minimum required guarantee amount for Type III is zero where the provider keeps 100 per cent of user funds in a segregated bank deposit, while for the other tiers it is ¥10 million divided by the number of tiers the provider operates.

The second point that changes a budget: **the Japanese funds transfer licence has no minimum capital**. Article 40\(1\)\(iii\) requires a "financial basis recognised as necessary" with no cross-reference to a numeric standard in subordinate legislation. By contrast, the crypto exchange and electronic payment instruments provisions do cross-refer, and the relevant Cabinet Office ordinances name ¥10 million. What actually ties up cash is the 履行保証金 performance guarantee deposit: Type I deposits an amount no lower than the required figure calculated for every single business day, Type II and Type III the peak over a self-set period of no more than a week \(Article 43\).

| **Tier** | **Per-transfer ceiling** | **Guarantee deposit** | **On the register at 31.07.2026** |
| --- | --- | --- | --- |
| Type I | none | calculated daily, deposited within a week; funds held only for the processing period | 8 |
| Type II | ¥1 million | peak over a period of up to a week | 83 |
| Type III | ¥50,000 | zero minimum where 100 per cent sits in a segregated deposit | 0 |

The 2025 reform, [in force from 1 June 2026](https://www.fsa.go.jp/news/r7/sonota/20260522/20260522.html), moved two things. The notoriously strict prohibition on Type I providers holding user funds was relaxed: a provider that uses the new preservation methods — a guarantor debt assumption agreement, a guarantor guarantee, or a performance guarantee payment trust — may carry a remittance obligation for up to two months. And cross-border collection agency arrangements \(収納代行\) were brought squarely inside the remittance perimeter, so schemes where an intermediary collects money in Japan for an offshore payee no longer sit outside the licence. The rationale is stated in the [Financial System Council working group report of 22 January 2025](https://www.fsa.go.jp/singi/singi_kinyu/tosin/20250122/2.pdf): offshore online casinos and investment fraud. The same report carries a number that appears in no press release — the existing depositary-based refund procedure takes **at least 170 days**, which is precisely why direct repayment through a guarantor bank or trust company was written into the Act.

## Prepaid instruments: where Japan's highest asset threshold actually sits

Prepaid instruments split into 自家型, redeemable only with the issuer, and 第三者型, accepted by third parties. The first requires notification, the second registration. Notification is triggered when the unused balance on a reference date \(31 March or 30 September\) first exceeds the base amount of ¥10 million; from the same moment the issuer must deposit a 発行保証金 equal to half of that unused balance \(Articles 3, 5 and 14 of the Act, Article 6 of the enforcement order\).

This is where the highest asset threshold in the Japanese payments perimeter is hiding. Under Article 5 of the enforcement order a registered third-party-type issuer must hold net assets of at least **¥100 million** — ten times the capital floor for a crypto exchange. The threshold falls to ¥10 million where the instrument is usable only within a single municipality, and to zero for certain non-profit bodies. The ladder is therefore inverted relative to intuition: a gift card programme carries a heavier balance-sheet requirement than a crypto asset exchange.

Since 1 June 2023 a separate overlay applies to 高額電子移転可能型 — highly transferable prepaid instruments. Article 5-2 of the ordinance sets the test: the ability to transfer more than ¥100,000 in a single operation or more than ¥300,000 in a month. Such an issuer must file a business implementation plan with the FSA in advance \(Article 11-2\) and picks up AML obligations. The 2026 reform also relaxed one thing: prepaid instruments may now be used for donations to national and local government and to authorised bodies, capped at ¥10,000–20,000 per donation.

## Japanese stablecoins: item 1, item 3 and a single intermediary

Japanese stablecoins do not live in the crypto chapter. They sit in a separate category, 電子決済手段 or electronic payment instruments, introduced by amendments in force since 1 June 2023, and that category is split by item number. Item 1 is a par-redeemable token issued by a bank or a funds transfer provider; item 3 is 特定信託受益権, beneficial interests in a specified trust. The item number determines the product economics.

JPYC is an item 1 instrument: the company is registered as a Type II funds transfer provider \(Kanto register, No. 00099, 18 August 2025\), and its ¥1 million per-transfer ceiling is a property of the licence tier, not of the token. On 24 June 2026 [JPYSC launched](https://www.sbigroup.co.jp/news/2026/0624_16425.html) — Japan's first trust-type yen stablecoin under item 3, issued by SBI Shinsei Trust Bank, distributed through SBI VC Trade, ERC-20, and **with no transfer ceiling at all**. That is the whole trade: the funds transfer route is cheaper to obtain, the trust structure removes the cap.

Trust-type reserves were loosened by exactly one notch in 2026. Following the FSA working group recommendation of 22 January 2025 and the ordinances now in force, backing may include Japanese government bonds with a maturity or residual maturity of three months or less \(US Treasuries for dollar-denominated coins\) and time deposits that can be broken early, subject to **a 50 per cent inclusion cap**. The remaining half stays in demand deposits.

The intermediary layer barely exists. At 24 June 2026 Japan had **one** registered electronic payment instruments service provider — SBI VC Trade, registered 4 March 2025 — handling three approved coins: USDC, RLUSD and JPYSC. Three years of the world's first stablecoin statute have produced a single intermediary. Since 1 June 2026 there is a lighter rung at the entrance: [仲介業, intermediation in electronic payment instruments and crypto assets](https://www.fsa.go.jp/common/shinsei/denanchuukai/index.html), registered without any capital requirement but tied to a specific principal operator that answers for the intermediary's conduct.

## Japanese crypto exchanges: the move to FIEA and a tax cut that is not general

A crypto exchange is 暗号資産交換業, registered under Chapter 3-2 of the PSA. Article 9 of the relevant Cabinet Office ordinance sets the asset test: capital of at least ¥10 million and non-negative net assets, and for anyone holding client assets, net assets no lower than the yen value of the required performance guarantee crypto. Self-regulatory membership is effectively compulsory: Article 63-5\(1\)\(vi\) requires refusal where the applicant has not joined an accredited association and has not adopted equivalent internal rules. There is one such association, JVCEA, accredited as a payment services association on 24 October 2018, as a financial instruments firms association on 30 April 2020, and for electronic payment instruments on 25 October 2024; [at the end of June 2025 it had 32 Type I members and six Type II](https://www.fsa.go.jp/singi/singi_kinyu/angoshisanseido_wg/gijishidai/20250731/05.pdf).

Survival rates matter more than headline licence counts. Registration numbers have reached No. 00031 in Kanto and No. 00004 in Kinki — 35 registrations granted over nine years, of which 26 are live. Funds transfer shows the same pattern: Kanto numbers run to No. 00102 against 77 live registrants.

The defining event of 2026 is the [amending Act to FIEA and the PSA, enacted 15 July 2026](https://www.fsa.go.jp/common/diet/index.html). Per the [FSA's own summary](https://www.fsa.go.jp/common/diet/221/02/02.pdf), regulation of crypto asset transactions moves out of the Payment Services Act and into the Financial Instruments and Exchange Act, with crypto positioned as a financial product distinct from securities. Stablecoins and prepaid instruments stay in the PSA; only crypto moves. Commencement is a date to be fixed by Cabinet order within one year of promulgation, so by mid-2027.

The tax change is subtler than the headlines. The [FY2026 tax reform outline approved by Cabinet on 26 December 2025](https://www.mof.go.jp/tax_policy/tax_reform/outline/fy2026/20251226taikou.pdf) introduces separate taxation at 20 per cent — 15 per cent income tax plus 5 per cent inhabitant tax — but only for 特定暗号資産: assets recorded in the financial instruments business register and disposed of to a crypto trading business. For all other crypto, the same document **tightens** the position: it removes the special deduction on transfer gains, removes the halving that applies to assets held more than five years, and blocks the offset of losses against other comprehensively taxed income. The three-year loss carry-forward also applies only within the specified-asset perimeter. The start date is 1 January of the year following the year the FIEA amendment takes effect, which means 2028 on a 2027 commencement. Consumption tax follows: crypto transfers are reclassified as akin to securities rather than means of payment, with 5 per cent of consideration counted in the taxable sales ratio.

## Korea: user protection, the VASP regime and a travel rule without a floor

Korea runs two statutes rather than one. Reporting and admission of virtual asset service providers sit in the Specific Financial Information Act \(특정금융정보법\), supervised by KoFIU, the financial intelligence unit inside the FSC. User protection sits in the Virtual Asset User Protection Act, in force since 19 July 2024; the FSS inspects, the FSC sanctions.

The VAUPA obligations are concrete and testable. [Under the FSC rules](https://www.fsc.go.kr/eng/pr010101/81217), user deposits are held at a bank, segregated from the operator's own funds and invested only in safe assets such as government bonds, and the operator must pay users a fee for the use of those deposits. At least 80 per cent of client virtual assets must sit in cold wallets, calculated monthly on the average daily won value over the preceding year. Insurance or reserves must equal at least 5 per cent of the value held in hot wallets, subject to a floor of ₩3 billion for won-market exchanges and ₩500 million for other providers. Continuous abnormal-trading monitoring with immediate reporting to the regulator and investigators completes the set.

The second layer is still being built. On 11 August 2026 the Cabinet approved amendments to the enforcement decree of the Specific Financial Information Act **abolishing the ₩1 million travel rule threshold**: originator and beneficiary information must accompany every transfer between registered providers regardless of size. The VASP registration provisions apply from 20 August 2026 and the expanded travel rule from roughly 20 February 2027 after a six-month grace period, alongside a risk-tiered regime for transfers to self-hosted wallets and monitoring of transfers of ₩10 million or more to offshore venues and personal wallets. How the global standard is structured and why thresholds diverge between jurisdictions is set out in the [travel rule breakdown](https://wiki.private.law/en/travel-rule).

Where Japan is cutting crypto tax, Korea is switching one on: 22 per cent \(20 per cent income tax plus 2 per cent local surtax\) on annual gains above ₩2.5 million from 1 January 2027, after two postponements. The 2026 budget proposals contain no further deferral; an opposition bill to abolish the tax outright was referred to subcommittee on 29 July 2026. The regime provides no loss carry-forward.

## The real-name account: Korea's binding constraint

Registration as a virtual asset service provider does not by itself open won trading. To take won deposits and pay out won, an exchange needs a real-name deposit and withdrawal account agreement with a Korean bank, under which a customer may fund only from an account at that bank held in the same name. The bank signs voluntarily and carries reputational and supervisory exposure for the exchange, so the scarce asset is the bank relationship, not the licence.

The arithmetic follows: five venues run a won market — Upbit, Bithumb, Coinone, Korbit and Gopax — while the remaining registered providers trade crypto-to-crypto only. On the FSC's semi-annual survey for the second half of 2025, as reported by Digital Today, Korean virtual asset market capitalisation at end-2025 was ₩87.2 trillion, down 8 per cent from end-June, with 11.13 million user accounts, ₩8.1 trillion of won deposits and average daily turnover of ₩5.4 trillion.

The register is contracting rather than growing. On KoFIU data compiled by Korean practitioners as of 8 January 2026 there were 27 registered providers against 29 in the December 2021 cohort: four were added in 2024 and two in 2025. Of 21 ISMS pre-certifications issued in 2023–2024, nine converted into full registration; average review time rose from roughly 11 months in 2024 to roughly 16 in 2025, with one applicant waiting more than 600 days. Corporate access to trading has been opening in phases since 2025 and remains tied to the second legislative stage.

## Korea: payment licences under the Electronic Financial Transactions Act

The Korean payments perimeter sits in the Electronic Financial Transactions Act and is built as a ladder with the amounts written into the statute. Electronic currency is the only category requiring FSC permission \(허가\), with capital of at least ₩5 billion under Article 30\(1\). Registration \(등록\) applies to electronic funds transfer, and to the issuance and management of debit and prepaid electronic payment means — ₩2 billion for each category under Article 30\(2\). The bottom rung is payment settlement agency work \(PG\), escrow and electronic bill presentment: Article 30\(3\) requires at least ₩500 million, or ₩300 million for operators whose quarterly electronic financial transaction volume stays under ₩3 billion.

| **Activity** | **Form of admission** | **Minimum capital** |
| --- | --- | --- |
| Electronic currency | FSC permission | ₩5 billion |
| Funds transfer, debit and prepaid payment means | registration | ₩2 billion per category |
| PG, escrow, electronic bill presentment | registration | ₩500 million; ₩300 million below ₩3 billion quarterly volume |

The prepaid segment was rewritten by rules in force from 15 September 2024. Issuers must separately manage 100 per cent of customer advance payments; discounts and reward points may be offered only where the debt ratio is 200 per cent or below, and the value of those benefits counts towards the segregated amount. Funds held under trust or payment guarantee insurance may be invested only in safe assets — Korea Treasury bonds, local government bonds, and deposits at banks and Korea Post. Only small issuers are exempt from registration: total outstanding balance of ₩3 billion or less and annual issuance of ₩50 billion or less. The same package brought BNPL under supervision comparable to credit card business.

The next layer is the response to the 2024 marketplace settlement collapse. An EFTA amendment passed the National Assembly on 28 November 2025 and was promulgated on 16 December 2025: PG settlement funds must be managed separately through a bank by deposit, trust or payment guarantee insurance, are protected from seizure and set-off, and the share subject to separate management steps up from 60 per cent to 100 per cent. The general commencement date is one year after promulgation. PGs with quarterly volume above ₩30 billion pick up a capital requirement, with the figure left to Presidential Decree. Sanctions run to administrative fines of up to ₩50 million, suspension of up to six months, and up to ten years' imprisonment for misappropriating settlement or prepaid funds.

## Korea: stablecoins, the second stage and the central bank's position

There is still no won stablecoin, and the obstacle is not technical. The fight is over who may issue. The Bank of Korea has consistently pushed a bank-centred structure, citing capital outflow risk; the FSC, which initially favoured broader access, had moved to the same position by January 2026: its revised proposal allows issuance by consortia in which banks hold at least 50 per cent plus one share, with minimum paid-in capital of ₩5 billion for the issuer. The ruling party opposes the bank-majority rule and was preparing its own version.

As of August 2026 no statute exists. On 29 July 2026 the FSC proposed to the National Assembly's political affairs committee that roughly ten pending digital asset and stablecoin bills be merged into a single Digital Asset Basic Act covering industry definitions, operator conduct rules, stablecoin issuance and circulation, exchange entry requirements, token issuance disclosure, AML and internal controls. The declared aim is passage within 2026, with a joint government and ruling-party package expected in September. Left open were the 51 per cent rule for bank consortia and a controlling-shareholder cap for exchanges in the 15 to 20 per cent range.

In parallel the Bank of Korea is building its own alternative in deposit tokens. The second stage of Project Hangang, with live settlement and commercialisation of a deposit token, was being prepared for autumn 2026, with additional banks added to the participant list in July 2026. The sequencing mirrors Hong Kong and the United States: first decide who may issue a monetary claim, only then how it circulates. Set against the [HKMA issuer licence](https://wiki.private.law/en/hk-stablecoin-ordinance), the [federal GENIUS Act regime](https://wiki.private.law/en/genius-act) and [European MiCA](https://wiki.private.law/en/mica-eu), Korea is the only major market where the issuer question has stalled the entire statute.

## Foreign entry: the letter of the law and the practice

On the letter of Japanese law a foreign company can hold the licence directly. Articles 40\(1\), 62-6\(1\) and 63-5\(1\) of the PSA describe the applicant identically: either a Japanese joint-stock company, or a foreign provider — that is, a foreign company with a business office in Japan — and in the latter case a representative in Japan who is domiciled in Japan. The register is maintained at the head office location, or for a foreign provider at its principal Japanese office. The new intermediary category is softer still: Article 63-22-5\(2\) refuses a foreign corporation that has not appointed a Japan-domiciled representative, and says nothing about a Japanese office.

Practice diverges from the letter. All 84 funds transfer providers, all 26 crypto exchanges and the single electronic payment instruments provider on the registers are Japanese joint-stock companies. Foreign groups enter through a subsidiary: the crypto exchange register at 30 June 2026 contains Binance Japan, Coinbase, OSL Japan, HashKey Japan, Gate Japan and OKCoin Japan, while Type I funds transfer holders include Wise Payments Japan and NIUM Japan. Serving Japanese residents from offshore without registration is not an option: the FSA publishes warnings to unregistered overseas venues, and on 28 November 2024 five received them at once — Bitget, MEXC Global, Bybit Fintech, bitcastle and KuCoin.

Korea formally admits a foreign applicant too, but the practical conditions — Korean-standard ISMS certification, a real-name bank account and shareholder approval — make direct entry close to unworkable. The instructive case: Binance acquired 67 per cent of the Korean exchange Gopax in February 2023 and only obtained KoFIU clearance on 15 October 2025, two and a half years later. On 29 January 2026 the FSC added another filter, extending criminal record checks to major shareholders rather than executives alone. The normal route is partnership with an already registered operator rather than one's own registration. The logic mirrors the choice between the [Singapore PSA licence](https://wiki.private.law/en/singapore-psa-payments) and the [DTSP regime](https://wiki.private.law/en/singapore-dtsp): the perimeter is set by whom the service is aimed at, not by where the company sits.

## Enforcement 2024–2026

Japan punishes with orders and market exit rather than fines. The largest episode is DMM Bitcoin: 4,502.9 BTC worth roughly ¥48.2 billion were stolen in May 2024, and on [26 September 2024 the Kanto Local Finance Bureau issued a business improvement order](https://www.fsa.go.jp/news/r6/sonota/20240926/20240926.html) under Article 63-16 of the PSA. The exchange made customers whole, wound down, transferred some 450,000 accounts and the associated assets to SBI VC Trade, and booked a net loss of about ¥48.1 billion for the year to March 2025. That is the mechanism behind a shrinking register: nine of the 35 crypto registrations ever granted are no longer live.

Korea works through monetary sanctions — and has lost two of them in court. On 25 February 2025 the FIU suspended part of the business of Dunamu, the operator of Upbit, for three months, later imposing a ₩35.2 billion fine; on 16 March 2026 Bithumb received a ₩36.8 billion fine and a six-month partial suspension on onboarding new users for roughly 6.65 million AML breaches, of which about 3.55 million were customer verification failures. Then came the part the coverage usually merges: the Seoul Administrative Court **annulled** the Dunamu suspension on 9 April 2026, holding that the regulator's requirements for transfers below ₩1 million were insufficiently defined, and on 30 April 2026 **stayed execution** of the Bithumb sanction — an interim measure rather than an annulment on the merits, leaving the fine's status unresolved. Abolishing the travel rule threshold in August 2026 reads as a direct answer to the first of those rulings.

There is a counter-example. On 24 July 2026 the Seoul Administrative Court backed the FIU against Darwin KS, a company converting bitcoin, ether and Tether into won through ATMs for foreign tourists. The court held that charging a fee on virtual asset exchange constitutes a business requiring VASP registration and rejected the argument that the company merely provided technical brokerage without holding assets. It is the first Korean judgment on the status of stablecoin exchange services.

## Common mistakes

**Treating the Japanese funds transfer licence as cheap because there is no capital floor.** There is no capital floor, but there is a performance guarantee deposit that Type I recalculates daily and funds in cash. A model in which working capital is financed by customer balances does not work at all in Type I, and after the 2026 reform the two-month holding window is available only to providers who have preserved all user funds through the new methods.

**Choosing Type III "for the pilot".** The tier has been empty on the register for five consecutive years. An empty tier means no supervisory practice, no reference applications and a longer review, in exchange for a ¥50,000 per-transfer ceiling that rarely accommodates a real product.

**Planning a Japanese stablecoin on a funds transfer registration without pricing in the tier cap.** JPYC's ¥1 million per transfer is a Type II licence constraint, not a property of the token. An institutional settlement product needs the item 3 trust structure used by JPYSC, and that means a trust bank inside the perimeter.

**Reading "Japan cut crypto tax to 20 per cent" as a general rule.** The 20 per cent rate applies only to assets recorded in the financial instruments business register and disposed of to a licensed operator. For everything else the reform removes the special deduction, the long-holding relief and loss offsetting, leaving the holder worse off than before.

**Budgeting a Korean exchange from the capital requirement.** Capital is not the constraint. The constraint is the real-name account agreement with a Korean bank, which cannot be bought or accelerated, and shareholder clearance, where a foreign group waited two and a half years.

**Treating Korean sanctions as final when pricing risk.** Two flagship FIU actions were undone by the courts in April 2026, one on the merits and one by interim relief. That cuts both ways: it lowers expected sanction severity and raises uncertainty about the rules under which sanctions are imposed.

## Scenarios

**Launching cross-border remittance into and out of Japan.** Type II covers an average ticket up to ¥1 million and accounts for 83 of the 84 register entries. Type I is needed only above ¥1 million, and the price is a daily guarantee calculation. Check separately whether the model amounts to cross-border collection agency work: since 1 June 2026 those arrangements require registration.

**Issuing a yen stablecoin.** The fork is the transaction ceiling. A funds transfer registration is cheaper and faster with a ¥1 million cap per transfer. The item 3 trust structure has no cap but requires a trust bank issuer and compliance with the 50 per cent reserve composition rule. Distributing someone else's coin in Japan means either an electronic payment instruments registration \(¥10 million capital\) or, since 1 June 2026, the lighter intermediary registration under a principal operator.

**Serving Japanese residents from offshore.** This does not work: unregistered solicitation of Japanese residents draws a public FSA warning. The workable route is a registered Japanese subsidiary, as used by Binance Japan, Coinbase and HashKey Japan, or an intermediary registration under an already licensed operator.

**Entering the Korean crypto market.** Own registration is realistic only with a Korean entity, ISMS certification and a bank relationship built in advance; average review is around 16 months and won trading is a separate negotiation with a bank. Acquiring a registered operator needs KoFIU clearance, and the Gopax precedent sets a two-and-a-half-year horizon. Partnership with an existing operator remains the fastest way in.

**Launching a Korean payments business with no crypto element.** The EFTA ladder is transparent: PG registration at ₩300–500 million is the cheapest entry, prepaid issuance costs ₩2 billion plus full segregation of advances, and electronic currency requires ₩5 billion and a permission. Any PG plan should budget for the phased step-up to full segregation of settlement funds under the 16 December 2025 amendment.

**Holding private-capital crypto inside this perimeter.** From 2028 the Japanese tax regime separates exchange-listed from off-exchange assets, so the custody structure drives the rate directly; from 2027 Korea applies 22 per cent with no loss carry-forward. Custody and reporting design is covered separately in [crypto for private capital](https://wiki.private.law/en/crypto-private-wealth) and the [compliance stack for a licensed operator](https://wiki.private.law/en/compliance-stack).

> 🍓 Japan and Korea solve the same problem with opposite instruments. Japan grants many permissions with low balance-sheet thresholds and compensates through client-money preservation: 84 funds transfer providers, 26 exchanges, zero licensees in the cheapest tier, one registered stablecoin intermediary. Korea grants few permissions and moves the filter into the banking system: 27 providers, five with a won market, two and a half years to clear a change of control. The calendar to 2028 is already set — Japanese crypto moves into FIEA within a year of the 15 July 2026 Act's promulgation, the 20 per cent rate on listed assets starts on 1 January of the following calendar year, the Korean travel rule loses its floor on 20 February 2027, and the 22 per cent Korean tax starts on 1 January 2027. The one genuinely open variable is Korea's digital asset statute, stuck for a second year on who may issue a won-denominated coin.

## Q/A

### **Can a foreign company hold a Japanese licence without incorporating locally**

Legally yes: the PSA allows registration of a foreign company that maintains a business office in Japan and appoints a Japan-domiciled representative, and this applies to funds transfer providers, electronic payment instruments providers and crypto exchanges alike. In practice every live licensee across the three registers is a Japanese joint-stock company, and foreign groups enter through a subsidiary. The one category with no Japanese office requirement is the intermediary registration introduced on 1 June 2026, where a resident representative suffices but a licensed principal operator is required.

### **Why does nobody take Type III funds transfer in Japan**

On paper it is the softest regime: a ¥50,000 per-transfer ceiling and a zero minimum guarantee amount where 100 per cent of user funds sit in a segregated bank deposit. The FSA register at 31 July 2026 shows zero registrants. The practical reason is economics: a ¥50,000 ceiling excludes most use cases, while the supervisory burden and governance requirements barely differ from Type II, where the ceiling is twenty times higher.

### **What actually stops a foreign exchange from entering Korea**

Neither capital nor the registration itself, but the banking layer. Won trading requires a real-name deposit and withdrawal account agreement with a Korean bank, entered into voluntarily; five venues have one. Add ISMS certification, an average review of about 16 months, and shareholder clearance: Binance waited from February 2023 until 15 October 2025 for approval of its 67 per cent Gopax stake.

### **When will Korea have a won stablecoin**

There is no date. As of August 2026 none of the roughly ten tabled bills has passed; on 29 July 2026 the FSC proposed merging them into a single Digital Asset Basic Act with the aim of enactment within 2026. The dispute is over eligible issuers: the Bank of Korea and, since January 2026, the FSC support consortia with a bank majority of at least 50 per cent plus one share and issuer capital from ₩5 billion, while the ruling party wants broader access. Until a statute exists, the central bank is developing deposit tokens through the second stage of Project Hangang.

---

## FAQ

### Can a foreign company hold a Japanese licence without incorporating locally

Legally yes: the PSA allows registration of a foreign company that maintains a business office in Japan and appoints a Japan-domiciled representative, and this applies to funds transfer providers, electronic payment instruments providers and crypto exchanges alike. In practice every live licensee across the three registers is a Japanese joint-stock company, and foreign groups enter through a subsidiary. The one category with no Japanese office requirement is the intermediary registration introduced on 1 June 2026, where a resident representative suffices but a licensed principal operator is required.

### Why does nobody take Type III funds transfer in Japan

On paper it is the softest regime: a ¥50,000 per-transfer ceiling and a zero minimum guarantee amount where 100 per cent of user funds sit in a segregated bank deposit. The FSA register at 31 July 2026 shows zero registrants. The practical reason is economics: a ¥50,000 ceiling excludes most use cases, while the supervisory burden and governance requirements barely differ from Type II, where the ceiling is twenty times higher.

### What actually stops a foreign exchange from entering Korea

Neither capital nor the registration itself, but the banking layer. Won trading requires a real-name deposit and withdrawal account agreement with a Korean bank, entered into voluntarily; five venues have one. Add ISMS certification, an average review of about 16 months, and shareholder clearance: Binance waited from February 2023 until 15 October 2025 for approval of its 67 per cent Gopax stake.

### When will Korea have a won stablecoin

There is no date. As of August 2026 none of the roughly ten tabled bills has passed; on 29 July 2026 the FSC proposed merging them into a single Digital Asset Basic Act with the aim of enactment within 2026. The dispute is over eligible issuers: the Bank of Korea and, since January 2026, the FSC support consortia with a bank majority of at least 50 per cent plus one share and issuer capital from ₩5 billion, while the ruling party wants broader access. Until a statute exists, the central bank is developing deposit tokens through the second stage of Project Hangang.

---

## Factual claims

- Non-bank remittance in Japan is 資金移動業, a registered activity under Chapter 3 of the Payment Services Act (Act No.
- The 2025 reform, in force from 1 June 2026, moved two things.
- Since 1 June 2023 a separate overlay applies to 高額電子移転可能型 — highly transferable prepaid instruments.
- JPYC is an item 1 instrument: the company is registered as a Type II funds transfer provider (Kanto register, No.
- Trust-type reserves were loosened by exactly one notch in 2026.
- A crypto exchange is 暗号資産交換業, registered under Chapter 3-2 of the PSA.
- The defining event of 2026 is the amending Act to FIEA and the PSA, enacted 15 July 2026.
- Where Japan is cutting crypto tax, Korea is switching one on: 22 per cent (20 per cent income tax plus 2 per cent local surtax) on annual gains above ₩2.5 million from 1 January 2027, after two postponements.

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