JAPAN Law and Practice Contributed by: Hiromi Hayashi, Daisuke Tsuta, Masaki Yukawa and Keiichi Bando, Mori Hamada & Matsumoto
ers’ licences are also installed with an IC chip which can be used for KYC purposes. In June 2023, the government issued a policy plan to abandon KYC using drivers’ licences or other identification and only allow KYC by JPKI in the future. eKYC in the Financial Sector (Other Than JPKI) In the context of KYC, separately from relying on the digital data stored in ID cards, another meas - ure used by financial institutions to establish users’ identity online is to require a user to take a selfie, (with a random pose) and a digital image of a government-issued ID card by installing and using a smartphone application provided by the financial institution and to send both the selfie, and the ID card image to the financial institution. The financial institution will compare the photo printed on the government-issued ID card and the selfie, photo sent by the user. The compari - son can be automatically processed provided that the false acceptance rate (FAR) is lower than a certain level determined by the government (note that the number is not publicly disclosed). This KYC measure is currently used by many financial service providers, but the Japanese National Police Agency proposed in February 2025 to cease this KYC measure in April 2027.
erty or financial benefits based on the outcome of chance events. For example, if non-fungi - ble tokens are randomly granted in exchange for charging by players in a game, it must be designed so that tokens valuing the same as or more than the charged amount will be granted to any players and no players lose by charging. The Guidelines on Blockchain Games jointly issued by three game industry associations provide cer - tain guidance on this issue. Prohibition of Multi-Tier Loot Box In many mobile games, in-game items are ran - domly granted in exchange for charging. Not all of this loot box feature is prohibited, but the Consumer Affairs Bureau issued a statement that “multi-tier loot box” is prohibited under the Act against Unjustifiable Premiums and Mislead - ing Representations in 2012. Before the prohibi - tion, many games had a feature which granted additional items when a player collects a cer - tain set of items to motivate drawing many loot boxes, but this feature is now prohibited. Under the current regulation, an item can be randomly granted when drawing a loot box, but additional items cannot be granted based on what items players collected. Payment Services Regulations If in-game currencies or items are purchased and do not expire for a period exceeding six months, such currencies or items can be regulated as prepaid payment instruments under the Pay - ment Services Act. If the purchased but unused amount exceeds JPY10 million on 30 September or 31 March of any year, a filing with the FSA and a security deposit of 50% of the unused amount with the government are required. To avoid being subject to these regulations, in-game currencies and items should be designed to be used within six months from purchase.
9. Gaming Industry 9.1 Regulations Overview
There is no comprehensive law regulating the game industry, but there are certain regulations which game developers should pay attention to. Prohibition of Gambling The Penal Code prohibits gambling, which is construed as competing for gain or loss of prop -
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