Japan’s ‘slow’ approval culture stifles crypto adoption: Expert

Japan’s slow and risk-averse regulatory approval culture is a major factor stifling cryptocurrency adoption and innovation in the country, according to expert opinions. According to a CEO of Web3 firm, highlighting that Japan’s approval process—governed by the Japan Virtual and Crypto Assets Exchange Association (JVCEA) and the Financial Services Agency (FSA)—is lengthy, often taking 6 to 12 months or more.

This bureaucratic delay leads to startups and liquidity moving offshore, as domestic projects cannot get timely approvals for token listings or Initial Exchange Offerings (IEOs). The process is described as designed to avoid downside risks rather than to promote innovation, involving multiple rounds of revisions and a lack of dynamic regulatory sandboxes that would support experimentation and growth.

The CEO points out that although the previously high crypto taxes were a visible hurdle, the primary bottleneck now is the "slow, prescriptive, and risk-averse" approval culture.

Compared to other Asian jurisdictions like Singapore, UAE, and South Korea—where regulatory pathways are faster and more flexible—Japan's system significantly lags behind. For example, South Korea focuses on ongoing exchange obligations rather than pre-approval, which speeds up listings considerably.

Experts urge Japan to reform its regulatory approach creating functional sandboxes that allow experimentation with governance etc, and implementing proportionate disclosure requirements. Without these changes, domestic crypto innovation is expected to continue migrating abroad due to uncertainty and long wait times, not merely because of tax burdens.

In contrast, other Asian countries like Hong Kong and the UAE are making strides by establishing agile regulatory frameworks that encourage crypto innovation and attract global investment—highlighting the competitive disadvantage Japan faces due to its slow regulatory culture.

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