Statutory definition

“In this Act, ‘crypto assets’ means the following, excluding those representing rights prescribed in Article 29-2(1)(viii) of the Financial Instruments and Exchange Act: (i) Property value usable to pay unspecified persons when purchasing or leasing goods or receiving services, and purchasable and saleable with unspecified persons (limited to value recorded electronically on electronic devices or other objects, and excluding Japanese and foreign currencies, currency-denominated assets, and electronic payment instruments (other than those constituting currency-denominated assets); the same applies in the following item), which can be transferred using an electronic data processing system; (ii) Property value exchangeable with unspecified persons for the assets listed in the preceding item and transferable using an electronic data processing system.”

The provision is Article 2(14) of the Payment Services Act. As its opening words, “In this Act,” indicate, this is a definition within that Act. Yet it is also the first provision to read when considering crypto asset taxation—not a provision of the Income Tax Act or Corporation Tax Act.

Although difficult to read, the structure is simple. A proviso following the opening text establishes one exclusion; items (i) and (ii) then list two types of property value, with another set of exclusions in the parentheses in item (i).

Overview

What distinguishes the two items?

Item (i) covers assets usable for payment. The initial requirement is usability “to settle consideration when purchasing or leasing goods or receiving services.” It then combines two capabilities: being “usable with unspecified persons” and, joined by “and,” being “purchasable and saleable with unspecified persons.” Usability alone or tradability alone is insufficient.

Item (ii) covers property value exchangeable for assets under item (i). Its reference to being “exchangeable for the assets listed in the preceding item” points to item (i). Even without direct use to pay for purchases, assets exchangeable for those under item (i) fall within crypto assets under item (ii). The definition thus extends to assets with less of a payment function.

Both items end with the requirement of being “transferable using an electronic data processing system.” The parentheses in item (i) also limit the scope to assets “recorded electronically on electronic devices or other objects.”

What does the “unspecified persons” requirement mean?

The most consequential wording is “unspecified persons.” It appears twice in item (i) and once in item (ii), three times altogether. Most of the requirements depend on this phrase.

Conversely, restricting counterparties tends to place an asset outside the definition. Examples include assets usable only at the issuer's stores or circulating only among a limited membership. Such assets are harder to fit within “usable with unspecified persons.”

Also note that the provision says “can,” rather than requiring actual use. It asks whether payment is possible, not whether payment has occurred. Never having used an asset for shopping does not by itself exclude it. Conversely, imposing or removing transfer restrictions may change whether the definition is met.

Does tax law have its own definition?

No. Neither the Income Tax Act nor the Corporation Tax Act writes its own definition; both expressly refer to the Payment Services Act. Article 48-2 of the Income Tax Act begins:

“...A resident's crypto assets (meaning crypto assets prescribed in Article 2(14) (Definitions) of the Payment Services Act (Act No. 59 of 2009); hereinafter the same in this Article).”

Article 61(1) of the Corporation Tax Act does the same. In defining the scope of short-term trading commodities, etc., it states:

“...Crypto assets prescribed in Article 2(14) (Definitions) of the Payment Services Act (Act No. 59 of 2009) (hereinafter referred to as ‘crypto assets’ in this Article).”

Both merely say “crypto assets prescribed in Article 2(14) (Definitions),” without restating the requirements. Neither “unspecified persons” nor “electronic data processing system” appears in these tax provisions.Whether something is a “crypto asset” for tax purposes cannot be determined from tax law alone.It depends on whether Article 2(14) of the Payment Services Act is satisfied.

This structure has a clear consequence. If the referenced definition in the Payment Services Act changes, the scope of tax law changes with it. The result can change even without a single amendment to the tax provision. The first step in crypto asset taxation is applying the Payment Services Act definition, before interpreting tax law.

What is excluded?

There are exclusions in two places: one in the proviso and a group in the parentheses in item (i). The proviso excludes assets “representing rights prescribed in Article 29-2(1)(viii) of the Financial Instruments and Exchange Act.” The Payment Services Act does not spell out that exclusion; determining its scope requires consulting the Financial Instruments and Exchange Act. The structure creates a carve-out in the crypto asset definition by reference to that Act.

The other group appears in the parentheses in item (i): “excluding Japanese and foreign currencies, currency-denominated assets, and electronic payment instruments (excluding those constituting currency-denominated assets).” Yen, dollars, currency-denominated assets and electronic payment instruments are not crypto assets. The parentheses end with “the same applies in the following item,” extending the exclusion to item (ii). Assets excluded under item (i) are not picked up under item (ii).

The inclusion of electronic payment instruments in these exclusions matters in practice. They are defined elsewhere in the Payment Services Act, outside the provisions on which this article relies, so their details are not addressed here. What the structure clearly establishes is thatan electronic payment instrument is not a crypto asset under Article 2(14) of the Payment Services Act.Because tax law adopts Article 2(14), neither Income Tax Act Article 48-2 nor Corporation Tax Act Article 61 applies to electronic payment instruments. Everyday language often groups anything called a coin under “crypto assets,” but the statutory wording, rather than the name, determines entry into the tax rules.

Is the definition the same for income, corporation and consumption tax?

Yes. All three refer to Article 2(14) of the Payment Services Act. We have already examined Income Tax Act Article 48-2 and Corporation Tax Act Article 61(1). Consumption tax takes a different route. Item (ii) of Appended Table 2 of the Consumption Tax Act lists the following among exempt transfers:

“...Means of payment prescribed in Article 6(1)(vii) (Definitions) of the Foreign Exchange and Foreign Trade Act (excluding collectors' items and other items prescribed by Cabinet Order), and similar instruments prescribed by Cabinet Order.”

Article 9(4) of the consumption tax Order specifies those “similar instruments prescribed by Cabinet Order.”

"Any means of payment specified in the Second Schedule to the Act, as defined by a decree, shall be electronic payment means, cryptocurrencies as defined in Article 14 of the Law on Payment and Capital Movements, and special withdrawal rights as defined in Article 15 of the International Monetary Fund Agreement."

Again, the wording is “crypto assets prescribed in Article 2(14).” It points to the same provision as income and corporation tax.

The Order reveals another point: electronic payment instruments, crypto assets and special drawing rights are listed alongside one another. This means electronic payment instruments and crypto assets are treated as distinct categories, consistent with Article 2(14)'s exclusion of electronic payment instruments from crypto assets. Nevertheless, both arrive at the same result of exemption from consumption tax.Different definitions do not necessarily produce different outcomes.

Since the three taxes share a definition, an asset cannot, at the definitional level, qualify as a crypto asset for income tax but not corporation tax. Differences arise after classification, in valuation methods and taxation. For the review of those rules, see Key points of the FY2026 tax system revision outline Please also see.

Points that require care in practice

• Consider judging whether your token is a crypto asset solely by whether it is exchange-listed. The provision requires that it be “purchasable and saleable with unspecified persons,” not that it be listed.
• Consider holding a token with transfer restrictions. These directly affect the “unspecified persons” requirement, so confirm the restrictions and when they were imposed or removed.
• Consider holding a so-called stablecoin. If it is an electronic payment instrument, it is expressly excluded by Article 2(14) of the Payment Services Act and is not a crypto asset for tax purposes.
• Consider points or items usable only within a game or service. If they can be used only with the issuer, they are less likely to satisfy item (i)'s requirement of being “usable with unspecified persons.”
• Some assets called tokens satisfy neither item (i) nor item (ii). If they are not crypto assets, Income Tax Act Article 48-2 and Corporation Tax Act Article 61 do not apply, and the applicable alternative provisions must be examined separately.
• Consider holding a token issued overseas. Article 2(14) of the Payment Services Act contains no requirement concerning country of issuance or issuer location. The statutory requirements themselves determine classification.

Legal basis

• Payment Services Act, Article 2(14) (Definitions) / Quoted wording: “In this Act, ‘crypto assets’ means the following, excluding those representing rights prescribed in Article 29-2(1)(viii) of the Financial Instruments and Exchange Act.”
• Payment Services Act, Article 2(14)(i) (Definitions) / Quoted wording: “property value usable with unspecified persons to settle payment when purchasing or leasing goods or receiving services, and purchasable and saleable with unspecified counterparties.”
• Payment Services Act, Article 2(14)(i), parenthetical wording (Definitions) / Quoted wording: “Limited to value recorded electronically on electronic devices or other objects, and excluding Japanese and foreign currencies, currency-denominated assets, and electronic payment instruments (other than those constituting currency-denominated assets). The same applies in the following item.”
• Payment Services Act, Article 2(14)(ii) (Definitions) / Quoted wording: “Property value exchangeable with unspecified persons for the assets listed in the preceding item and transferable using an electronic data processing system.”
• Income Tax Act, Article 48-2(1) (Calculation of the cost of transferred crypto assets, etc. and their valuation methods) / Quoted wording: “A resident's crypto assets (meaning crypto assets prescribed in Article 2(14) (Definitions) of the Payment Services Act (Act No. 59 of 2009); hereinafter the same in this Article).”
• Corporation Tax Act, Article 61(1) (Gains and losses on transfers and market valuation of short-term trading commodities, etc.) / Quoted wording: “Crypto assets prescribed in Article 2(14) (Definitions) of the Payment Services Act (Act No. 59 of 2009) (hereinafter referred to as ‘crypto assets’ in this Article).”
• Consumption Tax Act, Appended Table 2, item (ii) / Quoted wording: “Means of payment prescribed in Article 6(1)(vii) (Definitions) of the Foreign Exchange and Foreign Trade Act (excluding collectors' items and other items prescribed by Cabinet Order), and similar instruments prescribed by Cabinet Order.”
• Order for Enforcement of the Consumption Tax Act, Article 9(4) / Quoted wording: “The instruments prescribed by Cabinet Order as similar to means of payment under item (ii) of Appended Table 2 of the Act shall be electronic payment instruments, crypto assets under Article 2(14) of the Payment Services Act, and special drawing rights under Article XV of the Articles of Agreement of the International Monetary Fund.”
• Financial Instruments and Exchange Act, Article 29-2(1)(viii) / This is the provision referenced as an exclusion by the proviso to Article 2(14) of the Payment Services Act. This article does not examine its content.