Japan is apparently about to legitimize cryptocurrency exchange-traded funds (ETFs) by 2028, because nothing says “we’re serious” like a government timetable. A Nikkei report suggests the second-largest economy in Asia is edging crypto into the mainstream, so put away your fear and your rice cooker-the future is funded by futures.
With tax relief from 55% to 20% and asset managers lining up to offer products, Japan is showing up fashionably late to Asia’s crypto ETF party-still, better late than never, especially when there’s champagne involved (metaphorically speaking, not literally, I hope).
Japan’s Regulatory Overhaul
The FSA plans to amend the Investment Trust Act’s enforcement order by 2028 and add cryptocurrencies to the list of eligible “specified assets.” Once Tokyo Stock Exchange gives the thumbs up, investors could trade crypto ETFs through ordinary brokerages. The plan mirrors the structure of gold and real estate ETFs, because apparently, blue-chip assets are the goldfish of finance-everyone recognizes them, but nobody is surprised when they’re in the tank.
Nomura Asset Management and SBI Global Asset Management are already prepping products, because if you’re going to watch a blockchain sunset, you want a product to buy. Industry estimates peg the crypto ETF market in Japan at around ¥1 trillion ($6.7 billion) in assets under management, a number that looks large until you compare to the U.S.-where Bitcoin ETFs have amassed over $120 billion. Metrics, am I right?
Tax Cut from 55% to 20%
The big news? Tax relief. The FSA plans to submit legislation in 2026 to reclassify cryptocurrencies under the Financial Instruments and Exchange Act, leveling the tax playing field so crypto gains are taxed at 20%-the same rate as stocks and investment trusts. Translation: fewer tears at tax time and more people realizing gains without needing a calculator made of coffee.
Currently, the tax burden has scared off many Japanese investors from realizing gains on crypto holdings. The proposed rate cut could unleash pent-up demand-like finally opening that sad jar of pickles you’ve been hoarding since 2017.
Investor Protection Framework
Japan’s approach is learning from the chaos. The FSA will require trust banks handling ETF custody to implement strict security protocols, addressing concerns raised by the 2024 DMM Bitcoin hack, which cost ¥48.2 billion. No one wants to be the person caught missing the risk memo-this time, they’re putting a lock on the metaphorical pantry.
Asset managers and securities firms will need to bolster risk disclosures and operational safeguards ahead of the 2028 launch. Because nothing says “we care about your money” like a regulator insisting you fill out more forms while the market tries to figure out where the entry is.
Asia’s Fragmented Crypto ETF Landscape
Regulatory vibes across the region vary wildly, because apparently uniformity is for printers, not markets.
Hong Kong remains the only Asian market with spot crypto ETFs for retail investors, launching six Bitcoin and Ether products in 2024 and adding Solana ETFs in 2025. AUM sits around $500 million-a nice chunk, but still a rounding error in U.S. dollars.
South Korea’s ruling Democratic Party is pushing a Digital Asset Basic Act via a dedicated task force and hopes to finalize a draft by month-end, but the timeline is fluid ahead of local elections. A Bitcoin spot ETF remains a moving target-a bit like your gym membership after New Year’s resolutions.
Taiwan opened access in 2025 to allow domestic investment funds to invest in overseas passive crypto ETFs. The FSC is pursuing crypto law, with Chairman Peng Jin-lung hinting that a New Taiwan dollar-backed stablecoin could launch by mid-2026. So basically, Taiwan is building a tech-forward wallet with a side of someday stablecoins.
Singapore hasn’t approved crypto ETFs for retail investors, with the Monetary Authority insisting digital tokens aren’t suitable for retail collective investment schemes. Because obviously those people need to stick to pickleball and broccoli.
By waiting until 2028, Japan can learn from others’ mistakes-but with South Korea pushing its own legislation and Hong Kong expanding offerings, the regional race remains a cliffhanger. Stay tuned for the next episode of “Markets: The Global Edition.”
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2026-01-26 09:06