Japan is reportedly likely to approve and list its first wave of crypto-based exchange-traded funds (ETFs) in the next two years as the country’s financial authorities work on rule changes that allow the investment products.
Japan To Join Global Crypto ETF Race In Two Years
On Monday, news media outlet Nikkei Asia reported that Japan’s first crypto ETFs could be listed as early as 2028, offering retail investors easier access to Bitcoin (BTC) and other digital assets.
This would mark a major shift in the country’s regulatory approach to digital asset-based products. Japanese regulators have been cautious about crypto funds, with the Financial Services Agency (FSA) repeatedly expressing its reservations about the investment products.
The FSA plans to amend the Investment Trust Act’s enforcement order to include cryptocurrencies in the list of specified assets for ETFs. Additionally, the agency will propose stronger safeguards to protect investors, Nikkei added without detailing its sources.
Ahead of the regulatory changes, Japanese giants Nomura Holdings and SBI Holdings are preparing to develop the country’s first crypto ETFs. In August, SBI filed to launch an ETF linked to both BTC and XRP, as well as a Digital Gold Crypto ETF, which would allocate 51% to gold and 49% to digital assets to mitigate investment risks.
As reported by Bitcoinist, Japan’s Minister of Finance Satsuki Katayama highlighted earlier this month that US crypto ETFs have expanded as “a means for citizens to hedge against inflation.”
In her New Year’s address at the Tokyo Stock Exchange’s (TSE) Grand Opening Ceremony, Katayama supported a potential launch of crypto-based investment products, suggesting that similar initiatives to those of the US would be pursued in Japan.
Notably, the US approved the first wave of spot crypto ETFs in 2024, based on Bitcoin and Ethereum (ETH), leading pension funds, endowment funds for major universities such as Harvard, and government-affiliated investors to include them in their portfolios.
As of January 23, BTC funds’ total net assets amount to approximately $115.8 billion, according to SoSoValue data. Nikkei noted that Japan’s asset management industry has estimated that Japanese crypto ETFs could eventually reach 1 trillion yen, worth around $6.4 billion.
Authorities Prepare For Japan’s ‘Digital Year’
Japanese authorities have been reviewing their regulatory system over the past few years to develop customer fund safety policies and allow innovation in a more reliable environment.
Last year, the Liberal Democratic Party and the Japan Innovation Party published their upcoming FY2026 Tax Reform. The tax reform is set to introduce significant changes to the existing taxation system, addressing the categorization and regulation of crypto assets, and reclassifying them as financial products.
The reform signals a shift from the regulators’ previous treatment of digital assets as speculative. Moreover, authorities are also exploring introducing a separate taxation system for crypto income, with a flat 20% tax similar to the stock system.
During her New Year’s address, Finance Minister Katayama also recognized the country’s efforts to integrate digital assets and blockchain technology into the local financial markets. She expressed her support of Japan’s development as an asset management nation, affirming that “there is still room for growth.”
Katayama declared that 2026 would be the “Digital Year” for Japan, asserting that this year “is a turning point” in overcoming deflation. Ultimately, she emphasized the importance of stock exchanges in supporting the transition to a growth-oriented economy that opens public access to crypto assets.
