Spot Bitcoin ETFs remain off Japan’s agenda, says major Asian asset managers

Japan’s regulators remain cautious about spot crypto ETFs despite the global shift towards approval, according to Sumitomo Mitsui Trust Asset Management.

Japan’s regulators maintain a cautious stance on spot crypto exchange-traded funds, unlike the more progressive approaches seen in markets such as the United States and Hong Kong.

Oki Shiozawa, chief investment officer at Sumitomo Mitsui Trust Asset Management, one of Asia’s largest asset managers with more than $620 billion in assets under management, said in an interview with the Financial Times that Japanese authorities are not currently in a position to approve crypto ETFs. .

“I cannot think of a way to successfully persuade these officials at this time. I’m not saying crypto-related ETFs are impossible. But Japan’s Financial Services Agency, which approves financial products, is fundamentally conservative.”

Oki Shiozawa

While Japan has positioned itself as a crypto-friendly country aiming to grow as an asset management hub, high tax rates and strict regulatory restrictions are hindering wider adoption of cryptocurrency. Profits from crypto investments in Japan are classified as miscellaneous income, subject to a tax rate of up to 55%, compared to the 20% tax rate for capital gains from ETFs.

Keisuke Kimura, vice president of the Japan Crypto Asset Cooperation Association, said the restrictions in the country are mainly due to “regulatory restrictions” and that the public is not interested in crypto at Mt. He explained that it was due to what he perceived as the influence of past scandals such as Gox and DMM. Significant losses are still fresh for investors.

“The current situation in Japan is primarily due to regulatory restrictions, as our laws do not currently allow crypto assets to be included in investment trusts, including ETFs.”

Keisuke Kimura

Despite these challenges, some companies are preparing for potential regulatory changes. Franklin Templeton and SBI Holdings partnered in July to develop new products, including crypto ETFs. Japanese banking giant Nomura has also launched a Bitcoin adoption fund for institutional investors.

The US approved the first spot Bitcoin ETFs in January, followed by Ethereum ETFs in July. Markets in the Asia-Pacific such as Hong Kong and Australia have made similar progress, prompting calls for Japan to adopt a similar approach.