Leading Japanese financial institutions—including Mitsubishi UFJ Trust Bank (MUFG), Sumitomo Mitsui Trust Bank, Nomura Securities, and SBI Holdings—have jointly proposed regulatory reforms to enable Bitcoin and Ethereum ETFs in Japan. The coalition also advocates for revising crypto taxation policies, notably implementing separate taxation for capital gains.
Rising Adoption of Crypto Investments Among Japanese Investors
A white paper co-authored by major trust banks, brokerages (e.g., Nomura, SBI), and exchanges (e.g., bitFlyer) highlights growing investor interest:
- Crypto investments climbed from 15th (2021) to 8th (2024) in asset allocation rankings.
- Allocation share surged from 0.8% to 7.3%, with peak participation among 30–40-year-olds.
- Bitcoin and Ethereum’s large market caps and proven track records position them as viable long-term accumulation assets.
Urging Regulatory Approval for Crypto ETFs
While the U.S. SEC greenlit Bitcoin spot ETFs (January 2024) and Ethereum spot ETFs (July 2024), Japan’s Investment Trust Act currently:
❌ Prohibits crypto-backed investment trusts.
❌ Bans overseas crypto ETF purchases via wrappers.
The proposal urges regulators to prioritize high-market-cap assets (e.g., BTC, ETH) for ETF eligibility, aligning Japan with global financial innovation.
👉 Why Japan’s ETF delay risks alienating investors
Tax Reform: A Critical Catalyst
Japan’s crypto taxation remains punitive:
- Capital gains treated as miscellaneous income, subject to 55% (45% national + 10% local) for top earners.
- Stocks enjoy lower rates (20% total).
Recent developments:
✅ The Democratic Party of Japan (DPP) proposed slashing crypto taxes to 20%, though implementation is pending.
👉 How tax changes could boost Japan’s crypto market
FAQ
Q: Why are ETFs important for Japanese investors?
A: ETFs provide regulated, low-barrier exposure to crypto without direct custody risks.
Q: How does Japan’s crypto tax compare globally?
A: At up to 55%, it’s among the highest—Germany (0%) and the U.S. (20–37%) are more favorable.
Q: When might ETF approvals occur?
A: No official timeline exists, but pressure from institutional proposals may accelerate reviews.
Risk Disclosure
Crypto investments carry volatility risk and potential total loss. Assess risk tolerance carefully.