Japan is making significant strides toward the approval of spot cryptocurrency exchange-traded funds (ETFs), with regulatory authorities indicating that the first offerings could receive the green light as early as 2028. According to a report from Nikkei Asia, the Financial Services Agency (FSA) plans to include cryptocurrencies among the assets eligible for ETF products.
This regulatory shift would enable funds that directly hold Bitcoin (BTC) and other digital currencies to list on the Tokyo Stock Exchange, providing investors with a regulated means of accessing cryptocurrency through conventional financial markets.
The initiative aims to simplify and secure cryptocurrency exposure for retail investors. Unlike direct ownership of digital assets, which requires managing wallets and private keys, ETFs allow investors to trade shares through standard brokerage accounts, eliminating on-chain transfers. This accessibility could potentially attract a broader audience to the cryptocurrency market.
Spot crypto ETFs have already gained momentum in other regions, with the United States and Hong Kong successfully launching their first products in 2024. In the U.S., these ETFs currently manage approximately $120 billion in net assets, with growing interest from institutional investors, including pension funds and university endowments.
Major financial institutions in Japan are expected to be among the first participants in this emerging market. Firms like Nomura Holdings and SBI Holdings are seen as potential issuers of the country”s inaugural crypto ETFs, although any new products will still require formal approval from the Tokyo Stock Exchange prior to their launch.
In early January, Japan”s finance minister referred to 2026 as “Digital Year One,” outlining plans to better integrate digital assets within the financial system. Proposed changes include reducing taxes on cryptocurrency gains to a flat 20%, permitting banks and brokerage firms to hold and trade cryptocurrencies, and designating major digital assets such as Bitcoin and Ether as financial products. Collectively, these measures could align digital assets more closely with established financial frameworks.
Investor interest in cryptocurrencies is already significant, with over 60% of Japanese investors expressing a desire for exposure to digital assets, according to recent surveys. Industry leaders caution that a lack of timely action could result in Japan falling behind other jurisdictions like the United States, Hong Kong, and Singapore, which are already advancing in the crypto ETF space. Additionally, South Korea has announced plans to introduce Bitcoin ETFs by 2026, further intensifying the competitive landscape.
The approval of spot crypto ETFs in Japan would signal a notable shift in the country”s regulatory approach. This development could accelerate the adoption of cryptocurrencies among both retail and institutional investors, fostering a more dynamic and inclusive financial ecosystem.
