A group of Japanese financial institutions are pushing for a focus on major cryptocurrencies like Bitcoin and Ether when it comes to the potential introduction of exchange-traded funds (ETFs) for digital assets in Japan. This move comes as Japan continues to debate on whether or not to allow the creation of crypto ETFs in the country.
The group, which includes prominent financial institutions such as Mitsubishi UFJ Trust and Banking Corp., Sumitomo Mitsui Trust Bank, bitFlyer Inc, Nomura Securities, and SBI Securities, submitted a series of proposals on Oct. 25 titled “Recommendations for the composition of crypto assets ETFs, etc. in Japan” as reported by Bloomberg. One of the key points in their proposal is the suggestion to prioritize Bitcoin and Ethereum for ETFs due to their large market value and stable track record, which makes them attractive for investors looking to build long-term assets.
In addition to recommending the focus on Bitcoin and Ether, the group also called for a review of Japan’s taxation system, proposing to separate tax on income earned from cryptocurrencies. The proposal emphasized that the views expressed are a consensus from the group members and not individual opinions.
However, despite the interest from Japanese companies in crypto ETFs, Japanese regulators remain cautious about approving spot crypto ETFs. Oki Shiozawa, the investment director at Sumitomo Mitsui Trust Asset Management, highlighted that the Financial Services Agency in Japan, which approves financial products, is known for its conservative approach.
Keisuke Kimura, the vice-president of the Japan Cryptoasset Business Association, also pointed out that Japan faces regulatory constraints and negative public perception towards cryptocurrencies due to incidents like Mt. Gox and DMM, which resulted in significant losses for investors.
Despite the challenges, some Japanese firms are optimistic about the potential of cryptocurrencies. Franklin Templeton and SBI Holdings, for example, joined forces in July to develop new products, including crypto ETFs. Nomura has also introduced a Bitcoin adoption fund for institutional investors.
While Japan grapples with regulatory hurdles, other countries have embraced the concept of crypto ETFs. The United States approved its first spot Bitcoin ETFs in January and followed up with Ethereum ETFs in July. Countries in the Asia-Pacific region like Hong Kong and Australia have also approved their own spot crypto ETFs, signaling a global trend towards the adoption of digital assets.
Overall, the push from Japanese financial institutions to prioritize Bitcoin and Ether for potential crypto ETFs reflects a growing interest in digital assets despite regulatory challenges and past incidents that have impacted the perception of cryptocurrencies in the country. As the debate continues, it remains to be seen how Japan will navigate the evolving landscape of cryptocurrency investments.
