Asia’s crypto ETF race heats up as U.S. Bitcoin and Ethereum ETFs see heavy outflows.
Japan plans to allow spot cryptocurrency exchange-traded funds by 2028, signaling a clear regulatory shift. The move positions the country as a late but potentially influential entrant in Asia’s evolving crypto ETF market.
The Financial Services Agency plans to amend investment rules to include cryptocurrencies as eligible ETF assets. According to a Nikkei Asia report, the proposal would integrate digital assets into regulated investment trust structures.
After approval, investors could trade crypto ETFs on the Tokyo Stock Exchange using standard brokerage accounts. This structure would remove wallet management requirements while maintaining clear regulatory oversight.
The ETF design would mirror existing gold and real estate products familiar to Japanese investors. As a result, the framework aims to reduce complexity while improving access and market transparency.
Nomura Asset Management and SBI Global Asset Management are preparing ETF products ahead of regulatory changes. Industry estimates suggest Japan’s crypto ETF market could reach one trillion yen in assets.
Regulators also plan to reclassify cryptocurrencies under the financial instruments law.
This adjustment would reduce the maximum tax rate on crypto gains from fifty-five percent to twenty percent.
Officials expect the tax reform to unlock delayed investor participation and improve market liquidity. Previously, high tax rates discouraged many investors from realizing gains.
Japan’s framework includes enhanced investor protection and stricter custody requirements for trust banks. These safeguards respond to past security incidents and aim to strengthen investor confidence.
Japan’s measured timeline allows regulators to learn from earlier markets while preserving competitiveness. However, delays may reduce immediate risk while increasing pressure from faster-moving regional peers.
Meanwhile, SoSoValue data showed broad weekly outflows across U.S. crypto ETFs.
Bitcoin ETFs lost $1.328 billion, ether ETFs lost $611 million, Solana ETFs gained $9.57 million, and XRP ETFs lost $40.64 million.
