As part of a recent initiative to spur the growth of crypto investment products in Japan, a coalition of Japanese companies has recommended that all upcoming exchange-traded funds (ETFs) in the region focus on Bitcoin ( BTC) and Ethereum (ETH).
The recommendation comes as Japan considers whether to follow the United States and other countries that have already approved cryptocurrency-backed ETFs.
The push for approval of crypto ETFs
It is no longer news that the recent introduction of crypto ETFs in the United States and other major countries like Hong Kong is seen as a milestone for the digital assets sector, after years of regulatory resistance.
Despite these countries’ embrace of crypto ETFs, 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, since October 25, a certain group, which includes major financial institutions, appears to be pushing and urging the country’s regulator to prioritize Bitcoin and Ethereum ETFs due to their “long-term market value and performance » which make them “well adapted”. » for building assets in the medium and long term.
In particular, the group’s proposal highlights the perceived reliability of Bitcoin and Ethereum, highlighting their track records and large market capitalizations, which are key players in the overall digital currency market.
As Japan explores a potential shift in its stance on crypto ETFs, this coalition appears to ensure the focus remains on well-established assets such as 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 advised Japan to reconsider its tax policy on crypto income.
Japan’s tax rate on crypto gains can be as high as 55%, which many believe is a deterrent for individual and institutional investors.
The group suggested that tax separation on income from cryptocurrencies could help make Japan a more “competitive” destination for digital currency investments.
Members of the coalition include key players in the Japanese financial landscape, such as Mitsubishi UFJ Trust and Banking Corp., Sumitomo Mitsui Trust Bank Ltd., cryptocurrency exchange bitFlyer Inc., and brokerage firms like Nomura Securities. Co. and SBI Securities Co.
These institutions with extensive industry experience have collectively expressed their concerns and recommendations as a consensus rather than individual opinions.
The coalition’s ideas come as Japan’s digital currency regulatory environment comes under scrutiny and the FSA has confirmed plans to review its regulatory policies. However, this review is expected to take time and its outcome remains uncertain.
Featured image created with DALL-E, chart from TradingView
