- Nomura Holdings and SBI Holdings are among the financial groups expected to launch Japan’s first crypto ETFs.
- The global crypto market capitalization has tripled over three years, reaching roughly $3 trillion.
- Spot bitcoin ETFs listed in the U.S. have grown to about $120 billion in total net assets.
Japan may move toward allowing its first exchange-traded funds (ETFs) that invest in cryptocurrencies, with potential listings as early as 2028, according to a report by Nikkei.
If adopted, the plan would provide everyday investors with a simpler route to bitcoin and other digital tokens, removing some of the complexity involved in buying and securely storing crypto directly.
The development comes as large global institutions increasingly add crypto ETFs to their offerings and as regulators in major markets treat digital assets as a more established part of modern investment strategies.
Japan’s Financial Services Agency (FSA) appears ready to test how far crypto exposure can be extended within traditional market products, while also tightening investor protection measures to address the associated risks.
Crypto ETFs could enter Japan’s regulated market
The FSA plans to add cryptocurrencies to the list of specified assets that ETFs can hold, Nikkei reports.
This would be a key regulatory step because it would allow fund managers to create products that track crypto prices and trade them on an exchange much like stock or commodity ETFs.
Authorities are also expected to propose stronger investor protection rules alongside the change.
Such safeguards are likely to be central to how Japan positions crypto ETFs, given the market’s history of sharp price swings and the losses retail traders have suffered during major downturns.
If the rule change is implemented, cryptocurrencies would move closer to the mainstream investment framework in Japan, becoming available through familiar products that operate under established oversight.
Nomura and SBI may lead the first wave
Several prominent financial firms are already seen as likely early entrants.
Nikkei named Nomura Holdings and SBI Holdings among groups preparing to create Japan’s first crypto ETFs, signaling growing interest from companies with established roles in the country’s financial system.
Any ETFs built on this framework would still need approval to list on the Tokyo Stock Exchange.
The exchange would decide whether these funds can be publicly traded, which would enable broader retail participation through ordinary brokerage accounts.
For issuers, ETFs could also provide a more scalable way to meet rising demand for crypto exposure while keeping investors within heavily regulated channels rather than direct crypto trading platforms.
Why ETFs could lower the barrier for retail investors
Cryptocurrencies have become a significant alternative asset class, but individual investors still face practical hurdles when buying them directly.
Bitcoin and other digital assets are traded and stored in crypto wallets secured by private keys, which can be difficult for less experienced investors to manage safely.
ETFs can change that experience.
Instead of learning wallet mechanics or taking on custody responsibilities, investors could buy and sell ETF shares on a stock exchange in the same way they trade equities.
That ease of access is a major reason crypto ETFs have become a popular gateway product in other markets.
Regulators elsewhere have already taken this route.
The U.S. and Hong Kong approved their first spot crypto ETFs in 2024, creating a precedent Japan could follow as it builds its own framework.
Institutional adoption rises despite volatility
Although bitcoin and other cryptocurrencies remain volatile, the sector has continued to grow.
Global crypto market capitalization has roughly tripled over the past three years, reaching around $3 trillion.
Institutional investors have played a larger role in transitioning cryptocurrencies into a portfolio-friendly asset class.
Pension funds, university endowments at major institutions and government-affiliated investors have begun including bitcoin ETFs in their holdings, supporting the notion that crypto exposure is moving beyond high-risk retail speculation.
The U.S. market illustrates the scale that can follow once regulated products become widely available.
Total net assets of spot bitcoin ETFs listed in the United States now stand at about $120 billion.
Some participants in Japan’s asset management industry estimate domestic crypto ETFs could eventually reach 1 trillion yen (around $6.4 billion).
If Japan proceeds with listings, that projection suggests significant domestic demand from investors seeking ETF-based exposure rather than direct ownership.