Japan is moving closer to approving its first Bitcoin exchange-traded fund (ETF), with the country’s financial regulators preparing a major overhaul of crypto investment rules that could open the door for regulated digital asset products by 2028.
The Financial Services Agency (FSA) is expected to revise investment-fund regulations after recent legislation moved oversight of spot cryptocurrencies from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA). The change would place crypto assets under a framework similar to traditional financial products such as stocks and bonds.
A diversification tool
As reported by U.Today, Japanese Finance Minister Satsuki Katayama recently said the government is on track to legalize cryptocurrency ETFs. The U-turn is mostly due to growing success of similar products in overseas markets.
Several major asset managers are reportedly exploring Bitcoin ETF launches in Japan. The market could attract up to 3 trillion yen in inflows by fiscal 2028.
Japanese investors increasingly view cryptocurrencies as a potential diversification tool. Aiyu Kiguchi, executive director of investment management at the National Business Pension Fund in Okayama, said the low correlation between cryptocurrencies and the US dollar was one reason the fund invested in crypto funds managed by overseas hedge funds.
The pension fund, which manages 21.5 billion yen in assets for around 1,200 small and medium-sized businesses, has allocated an initial 1% of its portfolio to crypto-related investments as part of a broader diversification strategy.
Major Japanese financial institutions are also positioning themselves for the potential ETF market. SBI Holdings proposed crypto ETF products in May, including a dual-asset ETF offering exposure to both Bitcoin and XRP.
SBI has set an ambitious target of reaching around 5 trillion yen in assets within just three years.
If approved, Japan’s first Bitcoin ETF would mark a significant step for the country’s cryptocurrency community.
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