Japan is making significant moves in the digital asset space as two leading brokerage firms, SBI Securities and Rakuten Securities, begin developing investment funds focused on cryptocurrencies such as BTC and ETH. Both companies plan to manage all fund processes internally with their own group firms, without the involvement of external partners. SBI Securities, along with SBI Global Asset Management, intends to launch both investment funds and exchange-traded funds (ETFs), while Rakuten is partnering with Rakuten Investment Management to create similar products accessible directly via its mobile app.
Interest in crypto funds surges in Japan
According to a Nikkei survey of 18 major brokerages, 11 are considering adding crypto-based investment funds to their product lineups. Major financial players such as Nomura, Daiwa, SMBC Nikko, Mizuho, and Mitsubishi UFJ Morgan Stanley have also signaled plans to roll out crypto investment products. Notably, Nomura and Daiwa have announced internal preparations for new crypto fund initiatives, while the SMBC Group has established a dedicated working team and Mizuho affiliate Asset Management One has begun research on the matter. Most institutions are closely monitoring the evolving regulatory environment before moving forward.
Japan’s Financial Services Agency is working on legal updates that will allow investment funds and ETFs to incorporate cryptocurrencies. The Investment Funds Act is set to add highly liquid assets like BTC and ETH to the list of approved investment products. The new regulatory framework is expected to take effect before 2028. Until now, individual investors in Japan had to open exchange accounts or digital wallets to trade cryptocurrencies; the advent of crypto funds would enable the buying and selling of digital assets directly from standard investment accounts, similar to stocks and bonds.
New bill targets tax reduction
A new bill under discussion in Japan’s parliament seeks to formally recognize cryptocurrencies as financial products. If enacted, the law will take effect in the fiscal year 2027. The most notable aspect is a significant reduction in the tax rate on crypto gains, which could drop from the current maximum of 55% to just 20%. This would place earnings from cryptocurrencies in the same tax bracket as profits from shares and bonds. Industry representatives argue that the previous 55% tax rate has been a major obstacle to the growth of Japan’s retail crypto market.
Most major crypto fund initiatives in Japan are awaiting the new regulatory framework. These changes are seen as part of the country’s accelerating transformation in its digital capital markets.
The regulation also aims to improve security standards for the custody and management of crypto assets. Institutions holding cryptocurrencies in their portfolios will face increased responsibilities, with detailed audits planned especially for large exchanges and fund providers.
Current situation in global markets
By the end of April, the total value of the global crypto market reached $2.55 trillion. While Bitcoin ETFs are already available in markets such as the US, Canada, Hong Kong, and Australia, Japanese investors have, until now, lacked access to such products. However, new regulations and escalating efforts by major brokerages signal that Japan’s stance may change in the near future. Both SBI Securities and Rakuten Securities are accelerating the development of new crypto investment solutions ahead of the anticipated 2028 final regulation.
