Japan is on the verge of a significant shift in its cryptocurrency landscape, with regulators indicating that the first spot cryptocurrency exchange-traded funds (ETFs) could receive approval for listing by 2028. A report from Nikkei Asia reveals that the Financial Services Agency (FSA) is contemplating adding cryptocurrencies to the roster of assets permissible for ETF products.
If this proposal moves forward, it would enable funds that hold Bitcoin (BTC) and other digital currencies to be listed on the Tokyo Stock Exchange. This development would provide investors with a regulated avenue to gain exposure to cryptocurrencies through traditional financial markets.
The initiative aims to simplify and enhance the security of cryptocurrency investment for individual investors. Unlike owning cryptocurrencies directly, which requires managing wallets, private keys, and making on-chain transfers, ETFs facilitate trading through standard brokerage accounts. This ease of access is expected to attract more retail investors into the crypto space.
Spot crypto ETFs have already made headway in other regions, with the United States and Hong Kong launching their first products in 2024. In the U.S., spot Bitcoin ETFs currently manage approximately $120 billion in net assets, and institutional investors, including pension funds and university endowments, have increasingly included them in their portfolios.
Major Japanese financial institutions, such as Nomura Holdings and SBI Holdings, are anticipated to be frontrunners in issuing Japan”s inaugural crypto ETFs. However, any such products will require formal approval from the Tokyo Stock Exchange before they can be launched.
Policy reforms are also gaining traction, with Japan”s finance minister recently declaring 2026 as “Digital Year One.” This statement highlights the government”s intent to better integrate digital assets into the nation”s financial framework. Plans include lowering taxes on cryptocurrency gains to a flat 20%, permitting banks and brokerage firms to trade cryptocurrencies, and reclassifying major assets like Bitcoin and ether as financial products.
These regulatory changes, coupled with a growing interest from investors—over 60% of Japanese investors express a desire for cryptocurrency exposure—could significantly influence the adoption of digital assets. Industry experts caution that without prompt action, Japan risks lagging behind other financial hubs, including the United States, Hong Kong, and Singapore, where similar initiatives are already underway.
Furthermore, neighboring South Korea plans to roll out Bitcoin ETFs by 2026, increasing the pressure on Japan to keep pace with its regional counterparts. The potential approval of spot crypto ETFs in Japan would represent a notable shift in the country”s regulatory approach and could drive broader adoption among both retail and institutional investors.
