I have been closely following the developments in Japan’s crypto market. Recently, there’s a noteworthy progress—Japan is preparing to introduce crypto asset ETFs, aiming to achieve this by 2028. This could be a turning point for Japan’s crypto ecosystem.
Currently, the barrier for Japanese investors to enter the crypto market is quite high. To access Bitcoin or other crypto assets, they need to open separate exchange accounts and manage digital wallets, which is a complex process. But if they can invest directly through ETFs within their existing securities accounts, the situation changes completely. This means institutional investors and retail traders can access the market through familiar channels.
After the U.S. launched Bitcoin ETFs in early 2024, the market response has been positive. The assets under management have now reached around $13 billion, attracting attention from pension funds and university endowments. Seeing this trend, Japanese institutional investors are naturally starting to consider similar options. According to Motoyuki Azuma of Convano Consulting, Japanese investors are hesitant to hold Bitcoin directly in their portfolios, but trust increases once it’s presented through formal ETF structures. He mentioned that a 2024 survey showed 54% of Japanese institutional investors plan to allocate crypto assets within the next three years.
However, realizing this plan isn’t simple. Japan’s regulatory framework needs adjustments—Tokyo Stock Exchange approval is required, and the Investment Trust Law must be amended to classify crypto assets as “specified assets.” The background is quite pragmatic: two years ago, a Japanese crypto platform experienced a security breach resulting in the loss of $306 million worth of Bitcoin, which made regulators more cautious. Their current focus is on ensuring strict standards for asset custody and customer protection.
Taxation is also a key issue. Currently, Japan imposes a 55% tax rate on crypto income, which discourages investors. The government plans a tax reform in 2026 to lower the tax rate on certain crypto assets to 20%, aligning it with stock taxes. If this policy is implemented, it could significantly boost Japanese investors’ interest in crypto assets.
Interestingly, major Japanese financial institutions are already gearing up. Nomura Asset Management, SBI Global Asset Management, Daiwa Asset Management, and companies under the Mitsubishi UFJ Group are developing potential crypto ETF products. SBI Holdings even reportedly plans to launch ETFs tracking Bitcoin and XRP. Tomohiko Kondo of SBI VC Trade mentioned earlier this year that crypto assets are no longer just trading tools—they can offer more opportunities through fund yields and diversification strategies.
However, Hajime Ikeda of Nomura Holdings also cautioned that launching products immediately after legislation passes might not be realistic. Rushing to market before clarifying client information protocols and security standards could pose significant risks. Therefore, while the goal is set for 2028, the actual rollout of products may require more time to refine. Overall, Japan’s crypto market’s institutionalization process is accelerating, which could serve as a turning point for Japan’s crypto ecosystem and set an example for the entire Asian crypto landscape.
