Japan Moves Closer to Approving Spot Cryptocurrency Exchange-Traded Funds
In a significant development, Japan is moving closer to approving spot cryptocurrency exchange-traded funds (ETFs), with regulators signaling that the first products could be cleared for listing as early as 2028. This move is expected to provide investors with regulated access to cryptocurrencies through traditional markets.
Key Developments and Implications
A report published by Nikkei Asia on January 26 stated that the Financial Services Agency plans to add cryptocurrencies to the list of assets eligible for ETF products. If approved, this change would allow funds holding Bitcoin (BTC) and other digital assets to list directly on the Tokyo Stock Exchange. This would give investors the opportunity to buy and sell cryptocurrency-related products through standard brokerage accounts, making it easier and safer for retail investors to gain exposure to cryptocurrencies.
The proposal aims to lower the hurdles for investors by eliminating the need for wallet management, private keys, or on-chain transfers. Spot crypto ETFs have already gained traction in other countries, such as the United States and Hong Kong, which approved their first products in 2024. In the US, spot Bitcoin ETFs now have net assets of around $120 billion, with pension funds, university endowments, and government-linked investors increasingly adding them to their portfolios.
Large Financial Groups Prepare for Launch
Large Japanese financial groups, such as Nomura Holdings and SBI Holdings, are expected to be among the first participants in issuing Japan’s first crypto ETFs. All products would still need formal approval from the Tokyo Stock Exchange before market launch. The interest of investors is already evident, with surveys showing that more than 60% of Japanese investors want to get involved in cryptocurrencies.
Regulatory Changes and Market Pressure
In early January, Japan’s finance minister called 2026 “Digital Year One” and outlined plans to better integrate digital assets into the financial system. The proposed measures include reducing taxes on cryptocurrency profits to a flat 20%, allowing banks and brokerage firms to hold and trade cryptocurrencies, and classifying major assets such as Bitcoin and Ether as financial products. These changes would bring digital assets closer to mainstream financial markets.
Pressure is also growing within the region, with South Korea announcing plans to launch Bitcoin ETFs in 2026. This raises expectations for Japan to keep pace with other major financial centers in Asia. The approval of spot crypto ETFs would mark a significant shift in Japan’s regulatory stance, potentially accelerating adoption among both retail and institutional investors.
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