Japan Leads Asia in CARF Implementation

Japan has joined the first wave of CARF implementation, making it one of the earliest Asian countries to adopt the global crypto tax reporting framework. Japanese crypto exchanges began collecting user data for international reporting in January 2026.

Japan's Crypto Market Context

Japan has been a pioneer in crypto regulation since recognizing Bitcoin as legal property in 2017. The country has:

• One of the world's largest crypto trading volumes
• A mature regulatory framework under the FSA
• Licensed crypto exchanges (registered as "Crypto-Asset Exchange Service Providers")
• Existing domestic reporting requirements

Why Japan Joined Wave 1

Japan's early adoption reflects several factors:

• G7 commitment: Japan has been an active participant in OECD tax transparency initiatives
• Existing infrastructure: Licensed exchanges already collect comprehensive user data
• Tax authority readiness: The National Tax Agency has experience with CRS implementation

What Japanese Exchanges Must Do

Crypto-Asset Exchange Service Providers registered with the FSA must:

• Collect tax residency self-certifications from all users
• Obtain and validate foreign Tax Identification Numbers
• Report transactions involving non-resident users
• Submit annual reports to the National Tax Agency

Impact on Foreign Users

Non-Japanese residents using Japanese exchanges should note:

• Their transaction data will be reported to Japanese authorities
• This information will be exchanged with their home country (if CARF-participating)
• Self-certification of tax residency is now required

Japan vs Other Asian Markets

Japan's Wave 1 participation puts it ahead of other major Asian crypto markets:

• South Korea: Also Wave 1 (January 2026)
• Singapore: Wave 2 (January 2027)
• Hong Kong: Wave 2 (January 2027)
• India: Not yet committed to CARF