Leading Japanese financial institutions have collectively proposed that Bitcoin and Ethereum should be at the forefront of any cryptocurrency ETF considerations in Japan. The proposal, submitted on October 25, brings together an impressive coalition of financial powerhouses, including Mitsubishi UFJ Trust and Banking Corp., Sumitomo Mitsui Trust Bank, bitFlyer Inc., Nomura Securities, and SBI Securities. These institutions highlighted the two cryptocurrencies’ substantial market value and established track records as key factors that make them suitable for medium to long-term investment vehicles.
However, the path to crypto ETF approval in Japan faces significant hurdles. The country’s Financial Services Agency maintains a conservative stance, influenced by historical cryptocurrency incidents such as the Mt. Gox collapse that resulted in substantial investor losses. Investment director Oki Shiozawa from Sumitomo Mitsui Trust Asset Management and Japan Cryptoasset Business Association vice-president Keisuke Kimura both acknowledge the regulatory constraints and lingering public skepticism that continue to shape Japan’s cautious approach to crypto investment products.
Despite these challenges, the global landscape for cryptocurrency ETFs has evolved significantly, potentially influencing Japan’s future decisions. The United States’ approval of spot Bitcoin ETFs in January 2024, followed by Ethereum ETFs, has set a precedent that other Asia-Pacific nations like Hong Kong and Australia have followed. Meanwhile, Japanese firms are actively preparing for potential market changes, as evidenced by Franklin Templeton and SBI Holdings’ partnership to develop new crypto products, and Nomura’s introduction of a Bitcoin adoption fund for institutional investors. The collective proposal from these financial institutions, emphasizing their unified stance rather than individual opinions, signals a growing institutional appetite for regulated cryptocurrency investment vehicles in Japan.
