How to Buy Bitcoin in Japan: A Complete Guide (2024)

Want to buy Bitcoin in Japan but don’t know how to start?

This guide will walk you through each step. We’ll cover choosing the right exchange, completing KYC verification, depositing funds, and securing your Bitcoin.

You’ll learn about top exchanges like BitFlyer, Coincheck, and Binance.

We’ll also dive into legal requirements, trends, and safest storage methods.

By the end, you’ll know exactly how to purchase Bitcoin safely and efficiently in Japan.

Step-by-Step Guide to Purchasing Bitcoin in Japan

• Learn how to buy Bitcoin in Japan from start to finish.
• Understand each stage of the process, from picking an exchange to securing your Bitcoin.
• Get answers to common questions about Bitcoin in Japan.

Step 1: Choose a Cryptocurrency Exchange

Benefits of Using a Regulated Exchange

Using a regulated exchange ensures your transactions are secure and you have recourse in case of issues. Regulated exchanges comply with local laws, which protect users from fraud. These exchanges also have higher liquidity, which means you can buy and sell Bitcoin more easily.

Overview of Popular Exchanges in Japan

• BitFlyer: One of the largest and most trusted exchanges in Japan. Offers a user-friendly interface and supports multiple cryptocurrencies.
• Coincheck: Known for its ease of use and robust security features. Supports a wide range of cryptocurrencies.
• Binance Japan: A global leader in crypto trading. Offers advanced trading features and a high number of cryptocurrencies.

Step 2: Complete KYC (Know Your Customer) Verification

Required Documents

To complete KYC verification, you will need:
– A valid ID (passport, driver’s license, or a My Number card).
– Proof of address (utility bill, bank statement) dated within the last three months.

Step-by-Step Through the Verification Process

1. Sign up: Create an account on your chosen exchange.
2. Upload ID: Upload a clear photo or scan of your ID.
3. Upload Proof of Address: Upload a photo or scan of your proof of address.
4. Selfie Verification: Some exchanges require a selfie holding your ID.
5. Submit: Send the documents for verification. This process can take a few minutes to a few days.

Step 3: Deposit Funds into Your Account

Accepted Deposit Methods

• Bank Transfer: Directly transfer funds from your bank account to the exchange.
• Credit Card: Most exchanges accept major credit cards for deposits. Note that fees can be higher.
• iDEAL: A payment method popular in some regions.

Currency Conversion Fees and Tips to Minimize Costs

Always check the currency conversion fees if you are depositing in a currency other than Japanese Yen. Some tips to minimize costs:
– Use bank transfers when possible, as they often have lower fees.
– Avoid multiple small deposits to keep the total fees lower.

Step 4: Buy Bitcoin

Navigating the Exchange’s Trading Interface

Each exchange has a different interface, but the basic steps are usually the same:
1. Go to the market section: This is usually found in the main menu.
2. Select Bitcoin: Choose Bitcoin from the list of available cryptocurrencies.
3. Decide on the amount: Specify how much Bitcoin or Japanese Yen you want to trade.

Difference Between Market Orders and Limit Orders

• Market Orders: These are executed immediately at the current market price. Useful if you want to buy Bitcoin quickly.
• Limit Orders: These are executed only at a specific price you set. Useful for getting a better rate but may take longer to execute.

Step 5: Store Your Bitcoin Securely

Types of Wallets: Hardware vs. Software

• Hardware Wallets: Physical devices like Trezor or Ledger. More secure as they are offline.
• Software Wallets: Applications or online platforms. Convenient but more prone to hacking.

Importance of Two-Factor Authentication for Online Wallets

Enable two-factor authentication (2FA) to add an extra layer of security. This requires you to provide an additional piece of information, usually a code sent to your phone, when logging in or making transactions.

Bitcoin is a technological tour de force. —Bill Gates, co-founder of Microsoft, investor, and philanthropist.

Bitcoin is legal in Japan and regulated under the Payment Services Act. Japan is a crypto-friendly country with one of the highest adoption rates of Bitcoin. Transactions are subject to taxation, and users should report their holdings annually.

Best Cryptocurrency Exchanges in Japan: Top Picks for 2024

Now that you know the steps to buy Bitcoin in Japan, it’s crucial to choose the right exchange. Here are the top cryptocurrency exchanges in Japan for 2024.

BitFlyer

Regulatory Compliance and Security Measures

BitFlyer stands out in regulatory compliance and security. Licensed across the EU and the USA, BitFlyer adheres to the guidelines set by Japan’s Financial Services Agency (FSA) ensuring high compliance standards. Security measures include cold storage and multi-signature wallets, making it a highly secure option. According to Sandra Cho, “these exchanges are built for cryptocurrency and are made as such. The disadvantages, however, are important” source.

Fees and Trading Limits

BitFlyer’s fee structure is straightforward. They charge a trading fee that ranges from 0.01% to 0.15%, depending on the trading volume. Trading limits vary, allowing high-volume traders to operate efficiently without many constraints.

Coincheck

User Experience and App Features

Coincheck is known for its user-friendly interface and rich features. The app is simple to use, making it ideal for beginners. It includes features like price alerts, easy navigation, and a straightforward layout, which makes it a go-to choice for many users.

Fee Structure

Coincheck adopts a fee model that charges a 0.1% trading fee on all transactions. What makes Coincheck appealing is its lack of deposit fees, although it charges 0.01 BTC for Bitcoin withdrawals. This approach keeps trading costs manageable for users.

Binance (Japan)

Availability of Altcoins

Binance Japan offers access to over 500 cryptocurrencies, which is impressive compared to the other platforms. This extensive portfolio allows traders to diversify their investments easily. It also integrates smoothly with the global Binance services, providing Japanese users with a wide range of trading options and tools.

Integration with Global Binance Services

Being part of the global Binance network, Binance Japan benefits from the advanced features and tools available on Binance. This includes futures trading, savings accounts, and staking opportunities, which can enrich the trading experience.

Comparison Table

Let’s compare these exchanges based on key features:

“Given that this industry and asset class is still relatively new, there are unique risks” – Sandra Cho.

Winner: Binance (Japan)

After evaluating these exchanges, Binance Japan emerges as the winner. Its extensive range of cryptocurrencies, advanced trading features, and integration with global services make it the most versatile and powerful option for traders.

Legal Requirements for Buying Bitcoin in Japan

TL;DR

• Know the Payment Services Act and how it protects you.
• Understand tax implications and what you need to report.

Regulatory Landscape for Cryptocurrencies

Overview of Japan’s Payment Services Act

In Japan, buying Bitcoin is governed by the Payment Services Act. This law mandates that crypto asset exchange providers must register with the Financial Services Agency (FSA). The aim here is clear: safeguard investors’ interests by enforcing stringent regulations.

This act requires companies to implement Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures. This ensures that Bitcoin transactions are monitored and helps keep illegal activities in check. Such regulations may seem restrictive, but they significantly boost investor confidence by mandating a basic level of compliance and security.

How strict regulations ensure investor protection

Japan’s rigorous regulations offer a high degree of investor protection. Exchanges must conduct Know Your Customer (KYC) checks, fulfilling responsibilities to prevent fraud and money laundering. They must also submit transaction records to the Japan Financial Intelligence Center (JAFIC). This oversight ensures transparency and security for investors.

Over the last 12 months, various updates and improvements were made to these regulations. In January 2024, the FSA introduced additional reporting requirements focusing on the usage of crypto assets in illicit activities, adding another layer of scrutiny to the transactions.

Necessary Legal Checks Before Buying

Tax implications of buying and holding Bitcoin

When you buy Bitcoin in Japan, you must understand the tax implications. Earnings from cryptocurrencies are classified as “miscellaneous income.” They are subject to tax rates that could go as high as 55%. It’s important to keep detailed records of your transactions to calculate your earnings accurately.

The last year saw changes in how tax regulations were enforced. In May 2023, the National Tax Agency refined rules for better clarity on what constitutes taxable income, making it easier for holders to comply.

Yearly reporting requirements for crypto holders in Japan

Interestingly, there’s no general yearly reporting requirement for all crypto holders. However, transactions that exceed JPY30 million must be reported to the Minister of Finance under the Foreign Exchange and Foreign Trade Act. Compliance with this act helps in tracking large transfers and preventing money laundering.

The year 2023 saw increased emphasis on compliance with this rule. From August 2023 onwards, the FSA initiated random audits to ensure crypto investors adhered to these reporting requirements. This change has significantly increased the accountability of large-scale crypto holders.

Does Japan have Bitcoin ATM?

Yes, Japan has Bitcoin ATMs. As of 2023, several ATMs were installed in major cities like Tokyo and Osaka. These machines allow users to buy and sell Bitcoin with ease. At the start of 2023, there were about 80 Bitcoin ATMs in operation. By March 2024, that number had increased to over 120.

Using a Bitcoin ATM is straightforward but more expensive than doing transactions through exchanges due to higher fees. However, they are convenient for quick buys or sells and provide a physical point of contact for users who prefer it over online exchanges.

In terms of global context, Japan stands alongside countries like the United States, Canada, and Germany in offering these machines. If you’re traveling or newly moved to Japan, knowing how to buy Bitcoin in Japan through various methods, including ATMs, is helpful.

Looking at the legal and regulatory landscape, Japan has implemented a comprehensive framework that protects investors while ensuring compliance. Over the next 12 months, expect more refinements in the regulatory environment. The FSA might introduce newer rules to keep up with evolving international standards.

What I would do: Keep up to date with the FSA announcements and consider consulting a tax professional to navigate these regulations smoothly. This will ensure you’re always compliant and can take advantage of any favorable changes that might be introduced.

Trends in Bitcoin Purchases in Japan (2023-2024)

TL;DR

• Rise in Bitcoin ATMs across Japan
• Surge in mobile app-based trading
• Expect continued growth in both areas

Increased Adoption of Bitcoin ATMs

Locations and How to Use Them

Bitcoin ATMs have become more common in Japan over the past year. January 2023 saw only a few dozen operational machines mainly in Tokyo and Osaka. By December 2023, the number had grown to over 150 ATMs across various cities. This exponential growth is largely driven by consumer demand and improved infrastructure.

Using a Bitcoin ATM is straightforward. Most machines allow you to purchase Bitcoin using cash or debit cards. You start by selecting the ‘Buy Bitcoin’ option, scan your wallet QR code, and insert your cash or debit card. The process usually takes a few minutes.

Businesses have also started installing Bitcoin ATMs to attract tech-savvy customers. Convenience stores and shopping malls are the most frequent places to find them. However, the operational hours and fees vary, so it’s wise to verify terms before making a transaction.

Pros and Cons Compared to Online Exchanges

Pros:
1. Quick and Easy Access: No need for account setup or verification processes.
2. Privacy: Limited data required, contributing to a sense of anonymity.
3. Instant Transactions: Immediate transfer of Bitcoin to your wallet.

Cons:
1. High Fees: Transaction fees at ATMs are usually higher than online exchanges.
2. Limited Access: Despite growth, availability is still less than online platforms.
3. Lower Limits: Transaction limits are often lower, restricting large purchases.

What I would do: Take advantage of Bitcoin ATMs for small, quick transactions. For larger investments, online exchanges might be more cost-effective and convenient.

Growth of Mobile App-based Trading

Popular Apps for Mobile Trading in Japan

Mobile trading has increased significantly throughout 2023. Popular apps include bitFlyer, Coincheck, and Binance Japan. These apps have thrived due to their user-friendly interfaces and features like price alerts and real-time market updates.

bitFlyer was the top choice in early 2023, mainly for its comprehensive trading features and ease of use. Coincheck followed closely, appealing particularly to beginners for its simplicity and strong security features. Binance Japan entered the competition with advanced tools for seasoned traders, which drew in a substantial user base.

Throughout 2023, more users began relying on these mobile platforms due to the convenience they offer. Trading volume on these apps saw a 30% increase from Q1 to Q4. This trend is likely to continue, given the increasing mobile internet penetration and growing trust in these platforms.

Security Tips for Trading on Mobile

Security remains a key concern for mobile traders. Ensuring the safety of transactions and personal data is vital.

Tips:
1. Enable Two-Factor Authentication (2FA): Adds an extra layer of security.
2. Use Strong Passwords: Combining letters, numbers, and symbols helps secure accounts.
3. Stay Updated: Regularly update apps to benefit from the latest security patches.
4. Avoid Public Wi-Fi: Use secure, private networks for trading activities to prevent data breaches.

What I would do: Use a combination of strong passwords, 2FA, and keep the app updated. Only trade on secure internet connections to mitigate risks.

The trends observed over the past year indicate a shift towards greater accessibility and convenience in Bitcoin purchasing methods in Japan. The increased adoption of Bitcoin ATMs and the rise in mobile app-based trading provide multiple avenues for both new and experienced traders. Heading into 2024, these trends are likely to continue evolving, offering even more refined and secure ways to engage with Bitcoin in Japan.

For those looking to capitalize on these advancements, staying informed on regulatory changes and technology improvements will be key. Keep an eye on new security features and explore both ATMs and mobile trading apps to find the most effective method for your needs.

Safest Ways to Store Bitcoin in Japan

• Keep your assets away from hackers with hardware wallets.
• Personal control with cold storage.
• Increased security with multi-signature wallets.

Hardware Wallets

Overview of Top Hardware Wallets: Trezor, Ledger

Two of the most well-known hardware wallets are Trezor and Ledger. These devices store your private keys offline, making them less vulnerable to hacking. Trezor is known for its user-friendly interface and high-level security. Ledger, on the other hand, offers a sleek design and robust security features. Both wallets support multiple cryptocurrencies beyond Bitcoin.

• “Honestly, any reputable hardware wallet will be fine. The 2 most common are Trezor and Ledger. Just remember to use the native blockchain if your intention is to purely hodl.” *

Tips on Keeping Hardware Wallets Secure

1. Buy your hardware wallet directly from the manufacturer to avoid tampered devices.
2. When setting up, write down the recovery phrase on paper. Do not store it digitally.
3. Enable a strong PIN on your hardware wallet.
4. Regularly update the firmware to the latest version for improved security.
5. Store your recovery phrase and device in separate, secure locations.

Using a hardware wallet correctly can significantly enhance your Bitcoin security. Remember, this method keeps your keys offline, reducing your exposure to online threats.

Cold Storage

Benefits and Risks of Cold Storage

Cold storage involves keeping your Bitcoin offline, usually on a hardware wallet or a paper wallet. This method is secure because it completely disconnects your assets from the internet.

• “The safest methods will always be those you manage yourself without a connection to the Internet.” *

However, cold storage does have risks. Physical damage, loss of the storage device, or forgetting your recovery phrase can mean losing access to your assets.

How to Set Up Cold Storage

1. Choose a reputable cold storage method (hardware wallet, paper wallet).
2. Download the wallet and store it on an encrypted USB or write down the keys.
3. Disconnect from the internet before generating your wallet keys.
4. Write down the recovery phrase on paper and safeguard it.
5. Test the cold storage by transferring a small amount of Bitcoin first.
6. Store the cold storage device and recovery phrase in secure, separate locations.

Setting up cold storage requires careful attention to detail, but it offers strong protection for your assets.

Multi-Signature Wallets

Explanation of Multi-Signature Authentication

Multi-signature (multi-sig) wallets require multiple keys (signatures) to authorize a transaction. For example, a 2-of-3 multi-sig wallet means two out of three keys are needed to send Bitcoin. This adds an extra layer of security by ensuring that no single person can make unauthorized transactions.

• “Never EVER store your digital assets on ANY exchange long term. They should only be used for short term trading.” *

Multi-sig wallets are beneficial for both individual users looking for higher security and organizations requiring multiple approvals for transactions.

Ideal Use-Cases for Multi-Signature Wallets

1. High-value Bitcoin holders who want added security against theft.
2. Businesses needing dual approvals for transactions.
3. Families or groups managing shared Bitcoin assets.
4. Trusts and estates ensuring access in the event of sudden death.

Implementing a multi-sig wallet can significantly reduce the risk of unauthorized access and provide peace of mind to users and organizations.

Backup and Recovery Practices

Setting Up Wallet Backups

1. Write down your recovery phrase on paper or a metal card. Do not save it online.
2. Create multiple copies of the recovery phrase.
3. Store these copies in different, secure locations (safe deposit boxes, home safes).
4. Consider using fireproof and waterproof materials for storing the recovery phrase.
5. “Create secure backups of your wallet’s seed phrase or private keys and store them offline safely.” *

Steps to Recover Your Wallet if Lost or Stolen

1. Retrieve one of your recovery phrase copies from secure storage.
2. Purchase or borrow a new hardware wallet.
3. During setup, choose the option to recover an existing wallet.
4. Enter the recovery phrase exactly as it was originally written down.
5. Confirm the successful recovery by checking the balance and transactions in the new wallet.
6. “If you lose your bitcoin wallet, you may be able to recover your funds through a backup of your seed phrase or private keys. Without a backup, you won’t be able to recover your wallet.” *

These steps ensure that you can regain access to your Bitcoin even if the original wallet is no longer available. Proper backup and recovery practices are critical to maintaining access and security.

By following these practices, professionals can securely store their Bitcoin in Japan, mitigating risks such as theft and data loss.

Wrapping Up: Your Bitcoin Journey in Japan

Choosing the right exchange, completing KYC, depositing funds, buying Bitcoin, and securing it in a wallet are the core steps to buying Bitcoin in Japan. Legal regulations and new trading trends add important context.

The guidelines provided ensure you’re making informed choices, keeping your investment secure, and complying with local laws.

Start by selecting a regulated exchange like BitFlyer or Coincheck. Complete the KYC steps to verify your identity. Make sure to understand the deposit options and associated fees. Navigate the trading interface and decide on market or limit orders. Choose a secure wallet and set up two-factor authentication or cold storage.

Which exchange will you choose for your Bitcoin purchase today? Secure your Bitcoin wisely and stay updated on regulatory requirements.