Key takeaways
- Japan’s FSA is considering reforms that could allow spot Bitcoin ETFs starting in 2028.
- SBI and Nomura’s plans show two major companies expecting stronger demand for regulated crypto access.
- Implementing a 20% tax rate for crypto could determine whether local ETFs gain traction.
Japanese regulators evaluate custody standards for crypto
Japan is moving closer to authorizing a Bitcoin spot exchange-traded fund, a step that could open the country’s digital assets market to a broader group of institutional and retail investors.
Japan’s National Diet’s July 15 approval of the removal of bitcoin and about 105 other crypto assets from the Payment Services Act to the Financial Instruments and Foreign Exchange Act removed a central legal barrier to listing a bitcoin fund on the Tokyo Stock Exchange.
A launch in 2028 is possible, but far from assured. Legal changes, reviews of individual funds, and the implementation of new cryptocurrency taxation rules could all delay transactions beyond this date.
SBI Holdings and Nomura are among major Japanese financial groups reportedly preparing digital asset products ahead of any rule changes. Their interest suggests that firms expect demand to increase once exposure to Bitcoin becomes available on familiar brokerage platforms.
Regulations and tax policy could accelerate the Bitcoin ETF
Japan recently announced a major tax breakthrough for cryptocurrencies, moving from a punitive miscellaneous income tax of up to 55% to a separate tax regime of 20%, a major step towards treating crypto as a standard financial instrument.
The reclassification of cryptocurrencies under the Financial Instruments and Exchange Act (FIEA) brought digital assets closer to conventional securities and introduced stricter standards for disclosure, trading and market conduct.
This tax reform for cryptocurrencies could prove just as important in Japan’s move towards a national Bitcoin ETF.
Traditional finance could unlock new demand
A spot Bitcoin ETF would allow banks, fund managers, retired investors and brokerage clients to gain exposure without managing private keys or opening crypto exchange accounts.
Reports of the proposed reforms suggest that Japanese crypto funds could eventually attract hundreds of billions of yen. Actual demand will depend on fees, tax treatment, distribution and the price of bitcoin at the time of product launch.
Japan’s cautious stance reflects its history of major crypto failures, including Mt. Gox and the Coincheck breach. Regulators will likely require strict standards for custody, pricing, liquidity and investor protection.
The country also faces pressure to keep pace with competing financial centers. The United States approved spot bitcoin ETFs in 2024, while Hong Kong allowed spot bitcoin and ether funds.
For now, it’s best to think of 2028 as an early opening rather than a fixed launch date. Despite this, Japan’s policy direction is moving towards a regulated market for exposure to publicly traded bitcoin.
