Amid a broader global embrace of Bitcoin, the Japanese market regulator is looking to lift a ban on ETFs tracking crypto assets.
According to a report from local outlet Nikkei, the Japanese Financial Services Agency has moved to withdraw the existing regulatory hurdles for specific investment products on digital assets. The financial watchdog also plans to treat cryptocurrencies similarly to other financial vehicles, such as securities.
The FSA Changes Stance on Bitcoin
After earlier skepticism, Japan’s FSA seems to be warming up to cryptocurrencies. The mulled proposal would see the agency implement regulations on the virtual asset sector similar to those in other traditional markets.
Some of the teased implementations include tax reduction and prompting virtual asset firms to provide additional information to protect market investors. According to the Nikkei report, the FSA plans to cut the current tax rate of up to 55% to as low as 20%.
Furthermore, the top regulatory body will revoke a ban on crypto exchange-traded funds (ETFs). The investment vehicle already existing in the United States and Hong Kong will promote the adoption of Bitcoin among traditional institutions in Japan.
Meanwhile, the Japanese regulators have taken considerable steps to foster this new adoption curve. Currently, the FSA is conducting a closed-door study session with market experts to examine if the existing regulatory guidelines in Japan are sufficient.
Accordingly, the regulator will announce the direction of a system reform policy in the next four months. The agency will also promote the legal amendment at the ordinary session of the Diet in the National People’s Congress in 2026.
Stringent Regulatory Compliance Despite Easing Stance
Despite Japan’s easing stance on digital, the FSA remains cautious of the risks involved in exposure to the sector. As a result, the top Japanese regulatory body is keen to ensure compliance among virtual asset providers.
A few months after warning exchanges like Bybit, KuCoin, Bitget, and other exchanges of unlicensed operations, the FSA has clamped down on the platforms. Last week, the regulatory watchdog asked Google and Apple to delist these unregistered exchanges from their application store.
Although the Japanese government stated earlier that it would not follow America’s lead in considering a national Bitcoin stockpile, the Asian country may change its disposition as the tides continue to turn.
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