Japan’s progressive government officially began planning its first Bitcoin ETF. After approving a new law that recognizes cryptocurrencies as financial assets, regulators are now revising the fund’s rules.
If everything goes as planned, Japan can start its first Bitcoin ETF position by 2028.
Japan’s New Crypto Law Opens the Door to Bitcoin ETFs
Last week, CoinPedia News reported that Japan they distribute legally cryptocurrencies as financial assets under the Financial Instruments and Exchange Act (FIEA), the country’s Financial Services Agency (FSA) is now working on new rules for financial investments.
Previously, cryptocurrencies were considered payment methods under the Payment Services Act in Japan. The new law gives Bitcoin, Ethereum, XRP, and other digital assets more clarity.
Japan is also planning to cut crypto taxes from 55% to 20%, which many experts believe will bring more money to the market.
According to local reports, regulators want to launch the first Bitcoin ETFs on the Tokyo Stock Exchange by 2027 or 2028.
Japan Bitcoin ETF Could Open About $20 Billion
Japan’s ETF market could become Asia’s largest once the regulations are finalized.
According to estimates from domestic financial institutions, crypto-currency trusts, including Bitcoin ETFs, could attract up to JPY 3 trillion (about $19.5 billion) by the end of the 2028 financial year.
One reason is the diversity of history. Aiyu Kiguchi, Executive Director of Investment Management at the National Business Pension Fund, said the fund has started investing in cryptocurrencies that are managed by foreign hedge funds because Bitcoin’s price movement has little correlation with the US dollar.
His pension fund manages 21.5 billion yen in assets and plans to allocate 1% of its assets to digital assets.
If a Bitcoin ETF becomes available, large institutions such as Japan’s Government Pension Investment Fund (GPIF) could find an easy way to get into Bitcoin.
Can Japan Repeat the Success of the US Bitcoin ETF?
The Japanese plan comes after the success of US spot Bitcoin ETFs.
Since its launch in January 2024, US Bitcoin ETFs have attracted attention more than $51.68 billion in cumulative entries. The combined assets under management have reached $78.81 billion, representing about 6.03% of Bitcoin in circulation.
Among them, BlackRock’s iShares Bitcoin Trust (IBIT) has led the market with $60.6 billion in assets.
If Japan follows a similar path, analysts believe that the country could become one of the largest Asian markets managed by Bitcoin ETFs in the next few years.
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