Japan Financial Giants Push Regulator to Allow Bitcoin, Ethereum ETFs

A group of Japanese financial giants including major banks, crypto exchanges, and brokerages, are pushing for regulators to approve crypto ETFs.

The likes of Mitsubishi UFJ Trust and Banking, Nomura, Daiwa Securities, and bitFlyer, released the coalition report on Friday that also called for the regulator to revise its tax framework on crypto.

Japan's crypto tax is currently set at 55%. The group is calling for regulators to reduce the levy to be more in line with the stock markets' 20% tax policy. Democratic Party for the People leader, Yuichiro Tamaki also pledged last week to lower crypto tax to 20% if elected.

“If you think crypto assets should be taxed separately at 20% instead of treated as miscellaneous income, please vote for the Democratic Party for the People. There will be no tax when exchanging crypto assets with other crypto assets,” Tamaki said.

The group of Japanese tech titans argued that Bitcoin and Ethereum ETFs are safer long-term investment options due to their size and “stable track record.”

Japan's Financial Services Agency (FSA) has retained a cautious approach to crypto ETFs, despite the product's success in the US. Japan's crypto industry has been calling for a more regulation-friendly environment for crypto to operate in but the Mt Gox scandal continues to be a thorn in the industry's side.

Nonetheless, the industry is looking to learn from past mistakes. Last month, the FSA proposed a significant overhaul of the country's tax code for fiscal year 2025.

The FSA advocated for treating cryptocurrencies as traditional financial assets, aligning them with publicly traded investments. This move could pave the way for a more favorable tax environment for crypto holders in Japan.

“Regarding the tax treatment of cryptocurrency transactions, cryptocurrency should be treated as a financial asset that should be an investment target for the public,” the FSA said. 

Crypto-related activity among private Japanese firms has also displayed an increasing enthusiasm for the sector.

Just last week, crypto custody firm Komainu announced it is set to acquire Singapore-based custodian, Propine Holdings. Backed by Nomura, Komainu's acquisition is pending approval from the Monetary Authority of Singapore (MAS).

 In August, Sony announced its own public blockchain, Soneium, with the help of Singapore-based Web3 firm Startale Labs. The new layer-2 network built on Ethereum utilizes optimistic roll-up technology that allows users to transact for cheaper.

Soneium will be developed with Optimism blockchain's ecosystem OP Stack, which allows developers to create their own networks using Optimism's technology. Coinbase's Base and Worldcoin's World Chain also used OP Stack.