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Leading financial firms in Japan are advocating for crypto ETFs focused on Bitcoin and Ethereum, citing these assets as safer, long-term investments. Meanwhile, a coalition of industry leaders is calling for tax reform on crypto earnings, aiming to boost local investor interest in digital assets. Japan’s Financial Services Agency (FSA) is currently reviewing crypto regulations, signaling a cautious but evolving approach.
Japanese Firms Push for Bitcoin and Ethereum ETFs
Top financial institutions in Japan, including banks, crypto exchanges, and brokerage firms, have put forward official recommendations emphasizing the stability and reliability of high-market-cap cryptocurrencies like Bitcoin and Ethereum. According to these firms, the global reach and established track record of Bitcoin and Ethereum make them viable long-term investment options for Japan’s ETF market.
Despite Japan’s traditionally cautious stance on crypto investments, these industry players argue that Bitcoin and Ethereum offer a more stable investment vehicle due to their widespread adoption and relatively established position in global markets.
A group of Japanese companies said discussion on allowing ETFs for cryptocurrencies should focus on major tokens such as Bitcoin and Ether, as the country contemplates whether to follow overseas moves to permit the instruments https://t.co/K0yO48rY63
— Bloomberg Crypto (@crypto) October 25, 2024
Tax Reform on Crypto Earnings
Crypto gains in Japan can be taxed at rates as high as 55%, which has deterred many local investors from entering the market. To address this, a coalition of financial firms is proposing a separate tax structure specifically for crypto income. This proposal aims to create a more equitable tax system that could encourage greater interest in cryptocurrency investment within Japan. The current system’s complexity has caused hesitation among Japanese investors, and the coalition hopes to reduce the tax burden, leading to increased investor participation.
Japan’s Cautious Approach to Crypto ETFs
While the U.S. recently launched its first Bitcoin and Ethereum ETFs, Japan has yet to take the leap. The Financial Services Agency (FSA) in Japan remains cautious, emphasizing the need for an in-depth review of the benefits of crypto ETFs before implementing any regulatory changes. This careful approach may slow the growth of digital asset investment in Japan, as the FSA continues to prioritize financial security and tax fairness.
Potential Regulatory Changes by Japan’s FSA
The FSA has announced a review of its crypto regulations, assessing whether more flexible rules and potential tax reductions are viable. However, FSA officials warn that the process will take time, with no guarantee of immediate changes. The agency plans to proceed cautiously, balancing financial security and fair taxation as it evaluates these proposals.
