Japan’s Bitcoin ETF: Regulatory Shift on the Horizon

If approved, the new framework will require crypto companies to provide more detailed financial disclosures, a measure regulators believe will enhance investor protection. Additionally, the introduction of a Bitcoin ETF is expected to attract both retail and institutional investors, offering a more structured and transparent investment vehicle.

However, before making a final decision, the regulator has begun closed-door consultations with crypto experts and industry specialists to assess whether the current regulatory framework aligns with the needs of the digital economy. If the reform is approved, the new rules will not take effect before 2026, as they require legislative amendments through the Japanese Parliament.

In addition to measures resembling those introduced by former SEC Chair Gary Gensler, officials are considering a tax reduction on cryptocurrency gains from 55% to 20%, bringing them in line with traditional financial assets like stocks and bonds. The goal is to attract new investors to Japan’s crypto market and reduce capital outflow from the country.

FSA's regulatory actions have previously sparked debates within the industry. Recently, the regulator ordered Google and Apple to remove applications from unregistered crypto exchanges for Japanese users. While some in the crypto community criticized this as an attempt to stifle the industry, experts argue that such measures aim to establish a clear and transparent regulatory framework.