• Japan plans crypto ETF approval by 2028 as regulators expand asset rules and strengthen investor protection nationwide.
• Nomura and SBI support Japan crypto ETFs while US bitcoin funds show strong demand for regulated exposure globally.
• Asia moves faster on crypto ETFs and stablecoins pushing Japan to update digital asset rules to stay competitive.

Japan is preparing to approve its first crypto exchange-traded funds in 2028, according to a Nikkei Asia report. The Financial Services Agency plans to add cryptocurrencies to the approved ETF asset list. At the same time, regulators intend to tighten investor protection standards. 

This approach signals a controlled expansion rather than rapid market liberalization. Authorities aim to balance innovation with risk management across capital markets.

Institutional Backing Shapes the ETF Push

Major financial groups are expected to anchor the initial launches on the Tokyo Stock Exchange. Nomura Holdings and SBI Holdings are positioned to lead product development and distribution. Their involvement reflects strong institutional confidence in regulated crypto exposure. 

Meanwhile, policymakers have cited the scale of U.S. spot Bitcoin funds as a reference point. Those products now control about $115.8 billion in assets. The figure represents roughly 6.5% of Bitcoin’s market value. Consequently, Japanese regulators view ETFs as a familiar structure for cautious investors.

Policy Reforms Prepare the Market

The government has outlined a broader digital finance agenda ahead of ETF approval. Officials labeled 2026 as a milestone year for digital assets. The plans include cutting crypto profit taxes to a flat 20%. In addition, banks and brokerages would gain permission to hold and trade cryptocurrencies. 

Regulators also intend to classify Bitcoin and Ether as financial products. This shift would align them more closely with stocks and funds. Surveys show over 60% of local investors want crypto exposure through regulated vehicles. Therefore, authorities see ETFs as a bridge between demand and compliance.

Regional Pressure Builds Across Asia

Other Asian markets are moving faster on crypto ETFs. Hong Kong launched funds tracking Bitcoin, Ether, and Solana one year ago. Those products allow in-kind subscriptions and redemptions. Investors can exchange underlying assets for fund shares. 

Meanwhile, South Korea is advancing the Digital Asset Basic Act. Lawmakers expect completion in the first quarter of this year. The framework would support spot crypto ETF approvals. As a result, Japan faces growing regional pressure to modernize rules. Approval would help the country remain competitive with nearby financial hubs.

Stablecoins Signal Regulatory Direction

Japan has already approved its first yen-pegged stablecoin under strict oversight. The move shows regulatory comfort with controlled digital currency models. Hong Kong plans to issue its first stablecoin licenses this quarter. South Korea is also preparing a won-pegged stablecoin framework. Together, these steps reflect a regional push toward regulated digital money. Consequently, ETFs and stablecoins appear set to develop in parallel under unified oversight.