• Crypto & Funx
• 04 Feb, 2025

Japanese financial and crypto firms are urging regulators to approve ETFs for Bitcoin and Ether, emphasizing their investment potential.

The coalition emphasizes the long-term stability and high market caps of these cryptocurrencies.

Proposed tax reforms aim to lower rates on crypto income to boost investments.

A coalition of prominent Japanese financial and crypto firms urges regulators to consider allowing exchange-traded funds (ETFs) for cryptocurrencies, specifically targeting established tokens like Bitcoin and Ether .

The group’s , published on Friday, emphasizes that these two cryptocurrencies’ large market values and consistent performance over time make them ideal candidates for long-term investments

The companies gave a comprehensive view of why the major cryptos should be considered, saying that top coins such as Bitcoin and Ethereum have shown positive long-term returns despite having experienced short-term volatility. They noted that as of September 30, the market capitalization of Bitcoin is comparable to the Meta platform, which is the 5th largest company by market capitalization on the US stock market, valued at approximately ¥205.9 trillion.

More so, Ethereum’s market capitalization has spiked above Toyota, Japan’s most publicly traded company valued at around ¥40.2 trillion. The mention of high market caps for certain cryptocurrencies suggests that these digital assets, like Ethereum, are becoming more popular and considered valuable investments.

As Japan contemplates aligning with other nations on crypto ETFs, the coalition argues that Bitcoin and Ether offer stability that could benefit asset-building strategies for investors.

Tax Reforms: A Necessary Step to Boost Crypto Investments in Japan

In addition to calling for Bitcoin and Ether-focused ETFs, the group has suggested a comprehensive review of Japan’s cryptocurrency tax system. Currently, Japan applies taxes as high as 55% on gains from crypto investments, which could easily discourage investors. They propose a separate tax category for crypto income, potentially lowering these rates and stimulating more activity in the crypto market.

The coalition comprises influential players in the Japanese financial landscape, including Mitsubishi UFJ Trust and Banking Corp., Sumitomo Mitsui Trust Bank Ltd., crypto exchange bitFlyer Inc, and major brokerages like Nomura Securities Co and SBI Securities Co. However, the group placed a disclaimer on the proposal, clarifying that these recommendations represent a consensus rather than the individual opinions of each member.

Regulatory Challenges: Japanese Cautious Approach to Cryptocurrency ETFs

The Japan financial watchdog has been taking a cautious approach to crypto ETFs, with the FSA head expressing skepticism about their potential benefits in an August interview. However, despite this, a member of the FSA revealed that the agency would conduct reviews on its approach to crypto regulation, further saying that the review process could take longer before it gets completed.

The group’s proposal for a Bitcoin and Ethereum ETF follows the United States’ approvals earlier this year. These approvals have spiked interest in the digital asset from both institutional and retail investors.

While the Japanese government has taken a conservative approach to crypto regulation, the success of similar funds abroad could influence Japan’s stance on the matter.