In a recent move to fuel the growth of crypto investment products in Japan, a coalition of Japanese companies has done so recommended that any emerging exchange-traded funds (ETFs) in the region should focus on Bitcoin (BTC) and Ethereum (ETH).
This recommendation comes as Japan debates whether to follow the US and other countries that have already approved crypto-backed ETFs.
The Push for Approval of Crypto ETFs
It is no longer news that the recent introduction of crypto ETFs in the US and other major countries such as Hong-Kong is seen as a milestone for the digital assets industry, after years of resistance from regulators.
Despite the support that crypto ETFs have received from these countries, Japan, on the other hand, has so far been cautious on this front, with Financial Services Agency (FSA) officials previously expressing reservations about the benefits of these ETFs.
However, as of October 25, a certain group, including leading financial institutions, appears to be urging the country’s regulator to prioritize Bitcoin and Ethereum ETFs for their “market value and long-term performance,” making them “well suited” for medium- to long-term asset building.
The group’s proposal specifically highlights the perceived reliability of Bitcoin and Ethereum, noting their track records and significant market capitalizations, which are major players in the overall digital currency market.
As Japan explores a possible shift in its stance on crypto ETFs, this coalition looks set to ensure the focus remains on established assets like Bitcoin and Ethereum.
Recommendations for tax reform and regulatory review
In addition to recommending that Bitcoin and Ethereum be prioritized in potential ETF offerings, the coalition also recommended Japan to reconsider its tax policy on crypto income.
Japan’s tax rate on crypto profits can be as high as 55%, which many say is a deterrent for individual and institutional investors.
The group suggested that a separation of tax on cryptocurrency income could help make Japan a more “competitive” destination for digital currency investments.
Notably, members of this coalition include important players in the Japanese financial landscapesuch as Mitsubishi UFJ Trust and Banking Corp., Sumitomo Mitsui Trust Bank Ltd., crypto exchange bitFlyer Inc., and brokerage firms such as Nomura Securities Co. and SBI Securities Co.
These institutions with extensive industry experience have expressed their concerns and recommendations collectively as consensus rather than as individual opinions.
The coalition’s insights come as Japan’s digital currency regulations come under scrutiny, and the FSA has confirmed this plans to review its regulatory policies. However, this evaluation is expected to take time and its outcome remains uncertain.
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