Stablecoins Fuel Japan's Crypto Surge, Outpacing APAC Markets

Japan’s crypto adoption has more than doubled in the past year, driven by regulatory reforms and favorable tax policies, according to Chainalysis’ 2025 Geography of Cryptocurrency report. The country saw a 120% year-on-year increase in onchain value received between July 2024 and June 2025, outpacing growth in other Asia-Pacific (APAC) markets. This surge aligns with Japan’s efforts to align crypto rules with traditional securities frameworks, lower taxation on crypto transactions, and greenlight its first yen-pegged stablecoin, JPYC, in August 2025. Chainalysis noted that Japan’s crypto industry has advanced significantly, with stablecoins emerging as a key catalyst for adoption.

Stablecoins, particularly USD-backed ones, have gained traction across APAC, with stablecoin trading volumes in the region surging over 50% in early 2025. Japan’s regulatory environment, which previously restricted stablecoin listings on domestic exchanges, has begun to relax, fostering broader use cases. Chengyi Ong, Chainalysis’ APAC policy lead, highlighted that Japan’s “favorable policy and tax environment” has spurred activity, with stablecoins now serving as a critical infrastructure for remittances, gaming, and everyday financial transactions. The report also noted that South Korea and Australia are closely monitoring Japan’s approach, with the latter introducing regulatory relief for stablecoin distributors in 2025.

The APAC region as a whole saw crypto value received grow by 100% year-on-year, with Indonesia, South Korea, and India leading the charge. India topped Chainalysis’ Global Adoption Index, driven by youth-driven trading and remittances, while Vietnam’s market matured as crypto became embedded in daily financial activity. Ong emphasized that Japan’s growth, though robust, remains “stable but subdued” compared to peers like South Korea, but expectations of further policy reforms could accelerate adoption.

Regulatory shifts in Japan have included reforms to protect customer assets, such as cold wallet requirements post-2019, and international collaboration to harmonize stablecoin standards. The Financial Services Agency (FSA) has also prioritized cross-border payment innovations, leveraging blockchain to reduce costs and delays. However, challenges persist, including cybersecurity risks highlighted by recent hacking incidents at major exchanges. The FSA has since mandated enhanced security measures, including stricter key governance protocols.

Looking ahead, Chainalysis anticipates that stablecoins like USDC and JPYC will play a pivotal role in shaping Japan’s crypto ecosystem. The report underscores the need for global regulatory alignment, as fragmented frameworks complicate cross-border operations. Meanwhile, Japan’s regulatory journey—marked by early adoption post-Mt. Gox’s collapse and continuous policy refinements—positions it as a model for balancing innovation with risk mitigation.