Japan may allow its first cryptocurrency exchange-traded funds to list as early as 2028, according to a Nikkei report, a step that would mark a significant regulatory shift in one of Asia’s largest financial markets. The plan would give retail investors regulated access to bitcoin and other digital assets through traditional exchanges, a structure already in place in the United States and Hong Kong.
People familiar with the matter told Nikkei that the Financial Services Agency plans to amend its regulatory framework to add cryptocurrencies to the list of assets eligible for ETF products. The plan would give more people access to digital assets while also making it harder for investors to lose money. This is in line with Japan's historically careful approach to digital assets.
If approved, the rule change would allow crypto-linked ETFs to trade on the Tokyo Stock Exchange, subject to exchange authorization. Nomura Holdings and SBI Holdings stand out as early candidates to develop such products.
Regulatory intent rather than final approval
The discussions signal regulatory direction rather than a finalized policy. The FSA has not confirmed a timeline publicly, and any change would require formal consultations, revisions to enforcement orders, and legislative coordination before approval.
Under current rules, cryptocurrencies do not qualify as specified assets for ETFs in Japan. Direct exposure through exchange-traded products therefore remains unavailable to domestic investors. The proposed change would align crypto ETFs with existing structures used for gold and real estate funds.
Nikkei Asia reported on Jan. 26 that the FSA plans to add cryptocurrencies to the eligible asset list. The move would allow ETFs that hold bitcoin and other digital assets directly, rather than through derivatives or proxy vehicles.
Lower barriers for retail investors
The policy shift aims to reduce technical and operational hurdles for ordinary investors. Direct cryptocurrency ownership requires digital wallets, private key management, and on-chain transfers. ETFs remove those requirements by allowing exposure through brokerage accounts that operate within existing securities infrastructure.
The United States and Hong Kong approved their first spot crypto ETFs in 2024. Since then, institutional participation has expanded rapidly. U.S.-listed spot bitcoin ETFs now hold roughly $120 billion in net assets.
Pension funds, big university endowments like Harvard's, and investors linked to the government have all added bitcoin ETFs to their portfolios. This shows that crypto is becoming more popular as an alternative asset class.
Global crypto market capitalization has grown sharply over the past three years, reaching around $3 trillion. Volatility remains a defining feature, but asset managers increasingly view ETFs as a controlled entry point.
Industry positioning already underway
Japanese financial groups have begun preparatory work. SBI Holdings previously outlined plans to launch crypto ETF products, contingent on regulatory approval. On Aug. 6, 2025, the firm disclosed plans for a Bitcoin-XRP dual ETF and a gold-crypto hybrid structure, while noting that discussions with authorities continued.
Nomura Asset Management and SBI Global Asset Management have also prepared for potential product development ahead of regulatory changes.
Industry estimates suggest that Japanese crypto ETFs could eventually reach ¥1 trillion, or about $6.4 billion, in assets under management. Analysts caution that the figure remains speculative and depends on market conditions, investor demand, and finalized rules.
Investor protection and past disruptions
Japan’s cautious pace reflects lessons from past market shocks. The FSA plans to impose strict custody and security requirements on trust banks that handle ETF assets. The focus on safeguards follows incidents such as the 2024 DMM Bitcoin hack, which resulted in losses of ¥48.2 billion.
Asset managers and securities firms would also need to enhance disclosures and operational controls before any launch. Regulators aim to balance broader access with systemic stability.
Policy signals from government leaders
Political messaging has added momentum. On Jan. 5, Finance Minister Satsuki Katayama described the need for advanced fintech initiatives during a public speech.
“In the US, crypto assets are increasingly used via ETFs as inflation hedges, and Japan must also pursue advanced fintech initiatives,” she said, according to an English translation cited in local reporting.
Earlier statements from government officials framed 2026 as “Digital Year One,” with proposals that include tax reform and clearer classification of major cryptocurrencies as financial products.
The FSA plans to submit legislation to the Diet in 2026 that would reclassify cryptocurrencies under the Financial Instruments and Exchange Act. The proposal would cut the maximum tax rate on crypto gains from 55% to a flat 20%, aligning treatment with stocks and investment trusts.
Regional competition adds pressure
Japan’s timeline places it behind some regional peers. Hong Kong remains the only Asian market with spot crypto ETFs available to retail investors, with products launched in April 2024 and expanded later. South Korea has announced plans to introduce bitcoin ETFs in 2026, while Taiwan has widened access to overseas crypto ETFs through domestic funds.
Singapore continues to bar retail crypto ETFs, with regulators citing suitability concerns.
By waiting until 2028, Japan gains time to assess outcomes in other markets. At the same time, industry leaders warn that prolonged delays could weaken Japan’s position as a regional financial hub.
Approval of spot crypto ETFs would represent a clear break from past restrictions and could reshape how Japanese investors access digital assets through regulated markets.
Roman Zaika
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