Japan plans to open crypto ETFs in 2028, with the tax rate reduced to 20%, and the Asian competition intensifies.

On January 26, news reports indicate that Japan is accelerating its efforts to reform cryptocurrency financial regulation. According to Nikkei News, the Financial Services Agency (FSA) plans to amend the implementation details of the Investment Trust Law by 2028 to include cryptocurrencies within the scope of “specified assets” that can be held in ETFs. Once approved by the Tokyo Stock Exchange, investors will be able to buy and sell cryptocurrency ETFs through regular securities accounts, with a structure similar to gold and real estate ETFs.

Before the regulatory framework is officially implemented, Nomura Asset Management and SBI Global Asset Management have already begun developing related products. Industry estimates suggest that Japan’s future cryptocurrency ETF market could reach approximately ¥1 trillion, about $67 billion. Although this volume is still smaller than the over $1.2 trillion Bitcoin ETF market in the United States, it represents a significant incremental opportunity for Japan’s capital markets.

Tax policy adjustments are seen as the true “trigger point.” The FSA plans to submit legislation to the National Diet in 2026 to reclassify crypto assets under the Financial Instruments and Exchange Act, thereby reducing the maximum tax rate on individual cryptocurrency gains from 55% to 20%, aligning it with stocks and funds. For a long time, high taxes have suppressed trading interest among Japanese retail and high-net-worth investors, and this change is expected to unleash a large amount of potential capital.

Regarding investor protection, the FSA requires ETF custodian banks to implement stricter security measures in response to concerns raised by the 2024 DMM Bitcoin theft incident. Asset management companies must also strengthen risk disclosures and operational controls before product launches.

Looking at Asia, Japan’s participation will intensify regional competition. Hong Kong has opened multiple Bitcoin, Ethereum, and Solana ETFs to retail investors, South Korea’s ruling party is pushing the “Digital Asset Basic Law,” Taiwan allows local funds to allocate overseas crypto ETFs, and Singapore remains cautious. With Japan providing a clear timeline, the landscape of cryptocurrency investment in Asia is being reshaped.