🌎 Japanese Financial Institutions Urge Focus on Bitcoin, Ether for ETFs

A group of Japanese financial institutions is urging the government to focus on major tokens such as Bitcoin and Ether in discussions about allowing exchange-traded funds (ETFs) for cryptocurrencies.

According to a recent report, these Japanese companies submitted proposals on October 25 under a title that translates to “Recommendations for the composition of crypto assets ETFs, etc. in Japan.” The country remains undecided on whether to permit this financial instrument.

Focus on Bitcoin and Ethereum

The proposal highlights that if Japan decides to allow crypto ETFs, the priority should be on Bitcoin and Ethereum. The group also calls for a review of Japan’s taxation system, specifically recommending a separate tax on income earned from these investments.

The proposal emphasizes that the large market value and stable track record of these two cryptocurrencies make them attractive to investors interested in building assets over the medium to long term.

Major Financial Institutions Involved

The group consists of major financial institutions, including trust banks like Mitsubishi UFJ Trust and Banking Corp. and Sumitomo Mitsui Trust Bank, crypto exchanges such as bitFlyer Inc, and brokerages like Nomura Securities and SBI Securities.

It is important to note that the views reflected in the proposals represent a consensus among group members rather than individual opinions.

Regulatory Caution

On October 23, Oki Shiozawa, investment director at Sumitomo Mitsui Trust Asset Management, stated that Japanese regulators remain cautious about spot crypto ETFs. This caution stems from the conservative stance of Japan’s Financial Services Agency, the body responsible for approving financial products.

Keisuke Kimura, Vice-president of the Japan Cryptoasset Business Association, echoed this sentiment. He mentioned that the country faces regulatory constraints and negative public perception towards crypto due to past incidents such as Mt. Gox and DMM, which resulted in significant losses for investors.

Optimism and Global Trends

Despite these hurdles, some Japanese firms remain optimistic about the future of cryptocurrencies. In July, Franklin Templeton and SBI Holdings partnered to develop new products, including crypto ETFs. Additionally, Nomura has launched a Bitcoin adoption fund for institutional investors.

Globally, there has been a shift towards crypto ETFs. The U.S. approved its first spot Bitcoin ETFs in January, followed by Ethereum ETFs in July. Countries in the Asia-Pacific region, such as Hong Kong and Australia, have also approved their own spot crypto ETFs.