Japan's cryptocurrency trading market has experienced unprecedented expansion, with transaction values doubling to approximately ¥33.7 trillion during recent periods, driven by supportive regulatory policies and institutional adoption. The Japanese government's comprehensive reforms—including favorable tax treatments, expanded token classifications, and licensed stablecoin issuance—have significantly lowered barriers to entry for both retail and institutional investors. Major financial institutions like Nomura Holdings and Daiwa Securities are increasingly integrating digital assets into mainstream banking services, with Nomura's subsidiary applying for institutional broker-dealer licenses through the Financial Services Agency. Japan's balanced regulatory framework, combined with demographic factors and strong technology infrastructure, has positioned the nation as the fastest-growing crypto market in Asia-Pacific. This article explores how Japan's evolving regulatory landscape, institutional participation, a
Transaction Value Doubles as Investors Embrace Digital Assets in Japan
Japan's cryptocurrency trading market has experienced remarkable expansion in recent periods, reflecting a broader shift in investor sentiment toward digital assets. According to data from the Japan Virtual and Crypto Assets Exchange Association, transaction values reached approximately ¥33.7 trillion (around $230 billion) during the first seven months of the reporting period, representing a doubling of market activity compared to previous periods.
This surge in trading volume has been driven by multiple factors. Supportive regulatory policies in major markets, particularly in the United States, have created a more favorable global environment for digital asset adoption. Domestically, anticipated reforms including tax reductions and the introduction of new regulatory frameworks for crypto-focused investment funds have generated significant momentum among both retail and institutional participants.
The growing acceptance of cryptocurrencies within Japan's mainstream financial services sector has further accelerated market growth. Daiwa Securities, the nation's second-largest brokerage firm, recently announced that clients across its 181 retail branches can now utilize Bitcoin and Ether as collateral for yen-denominated loans. This development marks a significant milestone in the integration of digital assets into traditional banking services, demonstrating the increasing confidence of established financial institutions in cryptocurrency markets.
Nomura Holdings' strategic move through its subsidiary Laser Digital Holdings reflects this evolving landscape. The Switzerland-based unit is currently engaged in pre-consultation discussions with Japan's Financial Services Agency to obtain a license that would enable it to offer comprehensive trading services to institutional clients. Chief Executive Officer Jez Mohideen has indicated that this application demonstrates the group's strong confidence in Japan's digital asset ecosystem and its long-term growth potential.
The Japanese government's proactive approach to cryptocurrency regulation has played a crucial role in fostering market development. Recent policy initiatives have focused on creating a more favorable environment for both individual investors and institutional participants, addressing long-standing concerns about taxation and regulatory clarity.
One of the most significant reforms involves the treatment of digital assets for tax purposes. Historically, Japan's tax regime for cryptocurrencies has been considered burdensome, with gains from crypto trading subject to income tax rates that could reach as high as 55%. The government's commitment to easing these tax burdens has been welcomed by market participants, as it reduces barriers to entry and encourages broader adoption of digital assets as legitimate investment vehicles.
Additionally, regulatory refinements have expanded the classification of tokens that can be treated as investment instruments rather than purely speculative assets. This shift has important implications for institutional investors, who often face strict mandates regarding the types of assets they can hold in their portfolios. By providing greater regulatory certainty and expanding the universe of compliant digital assets, Japanese authorities have made it easier for pension funds, insurance companies, and other institutional players to allocate capital to cryptocurrency markets.
The licensing of Japan's first yen-backed stablecoin issuer represents another milestone in the country's regulatory evolution. Stablecoins, which are designed to maintain a stable value relative to fiat currencies, address one of the primary concerns about cryptocurrency volatility. The availability of a regulated, yen-denominated stablecoin provides Japanese investors with a more stable entry point into digital asset markets and facilitates easier conversion between traditional and crypto assets.
These combined reforms have contributed to a notable increase in market participation. Younger investors, who tend to be more comfortable with digital technologies, have been particularly active in embracing cryptocurrencies. At the same time, institutional players are increasingly viewing digital assets as a necessary component of diversified portfolios, particularly in an environment where traditional investment returns face pressure from low interest rates and economic uncertainty.
Global Institutions Eye Japan's Fast-Evolving Crypto Market Landscape
Japan's cryptocurrency market has emerged as one of the fastest-growing in the Asia-Pacific region, attracting significant attention from global financial institutions and investors. In the twelve-month period ending mid-2025, the country recorded a 120% increase in on-chain value received, substantially outpacing other major markets including South Korea, India, and Vietnam.
This exceptional growth rate reflects several unique characteristics of the Japanese market. First, Japan has established one of the most comprehensive regulatory frameworks for digital assets in the world, providing clarity and legal certainty that many other jurisdictions lack. The country's Financial Services Agency has taken a balanced approach, implementing strict oversight to protect consumers while avoiding overly restrictive measures that might stifle innovation.
Second, Japan's demographic and economic profile creates favorable conditions for cryptocurrency adoption. The country's aging population and low interest rate environment have pushed investors to seek alternative sources of returns, making digital assets an increasingly attractive option. Additionally, Japan's strong technology infrastructure and high levels of digital literacy facilitate the technical aspects of cryptocurrency trading and storage.
Third, the involvement of major traditional financial institutions like Nomura Holdings and Daiwa Securities lends legitimacy to the cryptocurrency market and provides retail investors with trusted channels for accessing digital assets. Unlike in some markets where crypto trading remains largely confined to specialized exchanges, Japan is seeing deeper integration between traditional and digital finance.
Nomura's expansion plans through Laser Digital Holdings exemplify the growing institutional interest in Japan's crypto market. The unit, which was unveiled in 2022, offers a range of services spanning asset management, venture capital, and now potentially broker-dealer services for both traditional financial institutions and cryptocurrency firms. Laser secured a full crypto business license in Dubai in 2023 and established a Japanese subsidiary in the same year, demonstrating a coordinated global strategy.
If granted regulatory approval, Laser plans to provide comprehensive broker-dealer services to institutional clients, including digital asset exchanges operating in Japan. This would position Nomura as a bridge between traditional finance and the cryptocurrency ecosystem, facilitating greater institutional participation in digital asset markets.
However, the path forward is not without challenges. Nomura reported a quarterly loss in its European operations in early 2025, with Chief Financial Officer Hiroyuki Moriuchi noting that Laser's performance had been "not very good." While CEO Mohideen initially projected that Laser would achieve profitability within two years of its launch, he later acknowledged that reaching break-even might take longer than anticipated.
Despite these setbacks, Nomura's continued commitment to expanding its digital asset operations in Japan signals confidence in the long-term prospects of the market. For regulators, the entry of established financial institutions like Nomura presents both opportunities and challenges. On one hand, institutional participation can bring greater stability, liquidity, and professionalism to cryptocurrency markets. On the other hand, it requires careful oversight to ensure that traditional financial institutions maintain appropriate risk management practices when dealing with the unique characteristics of digital assets.
The evolution of Japan's cryptocurrency market reflects a broader global trend toward mainstream adoption of digital assets. As regulatory frameworks mature and institutional participation increases, cryptocurrencies are transitioning from niche speculative instruments to recognized components of the financial system. Japan's experience offers valuable lessons for other countries seeking to balance innovation with investor protection in this rapidly evolving sector.
FAQ
Why does Nomura Securities want to expand cryptocurrency trading business in Japan?
Nomura Securities aims to expand crypto trading in Japan to capture growing market demand, enhance institutional participation, strengthen competitive positioning, and generate new revenue streams from the rapidly evolving digital asset sector.
What are Japan's regulatory policies for cryptocurrency trading?
Japan regulates crypto trading through the Payment Services Act（PSA）, requiring exchanges to register with the FSA. The regulatory framework emphasizes consumer protection, anti-money laundering compliance, and market surveillance to ensure fair and secure cryptocurrency trading operations.
What does Nomura Unit's broader access to crypto trading mean for the Japanese market?
It signals institutional adoption and regulatory progress in Japan. Broader access enables higher trading volumes, enhanced market liquidity, and attracts more institutional investors. This strengthens Japan's position as a major crypto hub and accelerates digital asset mainstream integration in traditional finance.
Investors can open an account on Nomura's platform, complete identity verification, deposit funds, and access crypto trading through the user-friendly interface. The platform offers real-time market data, multiple trading pairs, and secure custody solutions for seamless cryptocurrency transactions.
What distinguishes this initiative from crypto financial services in other countries?
Japan's approach emphasizes stricter regulatory oversight and institutional participation through licensed entities, enabling broader access while maintaining consumer protection standards that exceed many global markets.
What are the risks and challenges for Nomura entering the cryptocurrency trading field?
Nomura faces regulatory compliance complexities across jurisdictions, market volatility risks, cybersecurity threats, operational infrastructure requirements, and competition from established crypto platforms. Managing custody solutions and integrating legacy systems with blockchain technology also present significant implementation challenges.
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.
