Japan Races Toward Launch of First Bitcoin ETF Amid Regulatory Reforms

Japan is edging closer to launching its first Bitcoin ETF as regulators prepare rules for investment trusts and ETFs to hold crypto assets directly.

The Financial Services Agency plans to revise investment-fund rules after lawmakers approved amendments that bring crypto assets under the Financial Instruments and Exchange Act framework.

This change moves Japan toward treating crypto as a financial investment product rather than regulating it mainly as a payment asset, but it doesn't mean an ETF can launch immediately. Detailed rules and changes to its investment-trust framework are still needed before fund managers can offer products that hold crypto as a primary investment target.

Several of Japan's largest financial firms, including SBI Securities, Rakuten Securities, Nomura, Daiwa, SMBC-linked firms, and Asset Management One, are studying products that could enter the market once regulators complete the rules. These groups plan to offer crypto investment trusts and possible ETFs.

A regulated ETF in Japan may attract as much as ¥3 trillion by fiscal 2028, with retail investors potentially providing a large share of demand. The FSA has reported over 14 million domestic crypto accounts, while about 70% of account holders earn less than ¥7 million annually.