Binance Japan has activated a direct payment integration with PayPay, allowing users of Japan's largest mobile payment service to buy and sell cryptocurrencies through their digital wallets. The service went live this week, marking the first time Binance's Japanese platform has expanded beyond traditional bank transfers for fiat deposits and withdrawals.
The integration enables PayPay Money users to fund crypto purchases and withdraw digital assets back to their payment wallets with transactions starting from ¥1,000 (approximately $7). The service operates 24/7 with free deposits and a ¥110 ($0.70) withdrawal fee, according to the companies' joint announcement.
The payment integration follows PayPay's acquisition of a 40% equity stake in Binance Japan announced in October 2025. The strategic alliance brings PayPay's 70 million users into direct contact with cryptocurrency trading infrastructure, potentially representing one of the largest retail crypto onboarding initiatives in Asia.
"By combining PayPay's extensive user scale with Binance's innovative technology, we will be able to make Web3 more accessible to people across the country," said Takeshi Chino, General Manager for Binance Japan, in the October announcement.
The service also supports PayPay Points for crypto purchases, either independently or combined with PayPay Money. Users must complete identity verification on both platforms and link their accounts to activate the feature. Daily transaction limits are set at ¥1 million ($6,400), with monthly caps at ¥2 million ($13,000).
Binance Japan, which launched operations in August 2023 under registration with the Kanto Local Finance Bureau, previously required users to move funds through Japanese bank accounts or external crypto wallets. The PayPay integration eliminates these intermediary steps, enabling one-click deposits and withdrawals directly from the mobile payment app.
Japan's Crypto Tax Reform on the Horizon
The payment integration arrives as Japan's Financial Services Agency prepares sweeping changes to cryptocurrency regulation. The FSA plans to reclassify 105 digital assets, including Bitcoin and Ethereum, as financial products under the Financial Instruments and Exchange Act by 2026, according to reports from Asahi Shimbun.
The proposed reclassification would reduce capital gains taxes on approved cryptocurrencies to a uniform 20% rate, aligning them with stock trading taxation. Currently, Japanese residents must declare crypto profits as "miscellaneous income," subjecting high-volume traders to tax rates as steep as 55%.
The FSA's selection criteria for the approved list includes project transparency, issuer financial stability, underlying technology soundness, and price volatility profiles. The agency also plans to impose new restrictions on insider trading, prohibiting individuals and companies with connections to issuers or exchanges from trading while possessing material non-public information about listing dates or financial security details.
The proposed reforms are expected to be included in Japan's budget plan for early 2026, potentially catalyzing increased domestic trading activity and institutional participation in the country's digital asset markets.
Exchange Operator Eyes Stricter Rules for Crypto Treasury Companies
While the FSA pursues tax reform, the Japan Exchange Group has begun reviewing its approach to publicly listed companies that accumulate significant cryptocurrency holdings. The Tokyo Stock Exchange operator is considering stricter oversight measures for digital asset treasury firms following sharp stock declines that left retail investors with substantial losses.
JPX is exploring several regulatory options, including tougher enforcement of backdoor-listing rules and mandatory fresh audits for companies that pivot their core business toward crypto accumulation. Since September, at least three listed Japanese companies have paused plans to buy cryptocurrencies following pushback from the exchange, with warnings that their fundraising abilities would be restricted if they pursued crypto acquisition as a primary business strategy.
The regulatory scrutiny intensified after several high-profile losses among Japan's digital asset treasury companies. Tokyo-listed Metaplanet, which holds 30,823 BTC as the world's fourth-largest corporate Bitcoin holder, has seen its share price drop more than 79% from its June peak despite earlier gains of 420% in 2025.
JPX currently has no explicit regulations preventing listed companies from holding cryptocurrencies, but a spokesperson indicated the exchange is monitoring companies that raise risk and governance concerns to protect shareholders and investors. The potential restrictions mirror similar moves across Asia, with Hong Kong blocking at least five digital asset treasury listings and Australia's ASX capping cash and crypto equivalents at 50% of total assets.
Final thoughts
Japan's digital asset ecosystem continues expanding despite increased regulatory attention. The country recorded 120% growth in on-chain value received during the 12 months ending June 2025 compared to the prior year, outpacing other Asia-Pacific nations according to Chainalysis data.
The value of crypto transactions in Japan doubled to ¥33.7 trillion ($230 billion) during the first seven months of 2025, according to Japan Virtual and Crypto Assets Exchange Association data. The country now hosts over 13.2 million crypto accounts as of July 2025, with total digital asset holdings reaching ¥4.9 trillion ($34.3 billion) by September 2025.
Several Japanese corporations have adopted Bitcoin treasury strategies, led by companies like Metaplanet. Japanese startup JPYC has also announced plans to launch the nation's first yen-backed stablecoin, reflecting broader institutional interest in regulated digital asset products.
The PayPay-Binance integration positions SoftBank Group, which operates PayPay through its Japanese telecom arm, at the intersection of mainstream payments and cryptocurrency adoption. SoftBank has notably backed Twenty One Capital, one of the world's largest publicly traded companies with Bitcoin exposure holding approximately 43,500 BTC valued at $3.7 billion.
The integration launch also coincides with PayPay's preparations for a U.S. initial public offering, with investors reportedly expecting valuations exceeding $20 billion when the listing potentially occurs as early as December 2025.
As Japan balances crypto market expansion with investor protection measures, the convergence of accessible payment rails and evolving regulatory frameworks may establish new precedents for digital asset integration in traditional financial systems across Asia's third-largest economy.
