Satsuki Katayama announces Japan formalizes path for crypto investment funds
Japan’s Finance Minister Satsuki Katayama announced on July 10, 2026, that the Japanese government is formalizing a path to legalize cryptocurrency exchange-traded funds (ETFs). Speaking at the \”Open QUICK 2026\” seminar hosted by the financial information service QUICK, Minister Katayama confirmed that the nation is advancing efforts to integrate these digital asset products following their successful adoption in various overseas markets.
The regulatory shift hinges on a legislative revision passed by the Japanese House of Representatives. This amendment moves the oversight of spot cryptocurrencies from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA).
Legislative updates and tax implications for crypto ETFs
By reclassifying crypto assets as regulated \”financial products,\” the government will treat them under the same legal framework as traditional stocks and bonds, providing a structured investment environment for both retail and institutional participants.
The transition to the FIEA framework represents a significant turning point for the Japanese digital asset market. Under the proposed changes, the tax rate on crypto trading profits is expected to drop from a maximum of 55% to a flat 20%.
This adjustment aims to bring cryptocurrency taxation in line with other financial instruments like investment trusts and stocks, potentially taking effect for the 2028 tax year starting January 1.
The Financial Services Agency (FSA), which serves as the primary regulator for this transition, is moving to provide additional oversight for the growing sector. Reports indicate the FSA plans to establish a dedicated unit specifically for crypto assets and stablecoins by the end of July 2026. This move comes as investors increasingly move finance on-chain to access global liquidity and modern financial infrastructure.
Parliamentary timeline and implementation dates
Legislative progress has moved steadily since Japan’s cabinet approved a draft amendment to the FIEA in April 2026. Following the House of Representatives’ approval in June, the bill is currently under deliberation by the House of Councillors.
Local market experts and the Japan Exchange Group anticipate that the first crypto-tracking ETFs could launch on domestic exchanges as early as 2027, provided the current Diet session concludes the remaining legislative hurdles.
Further recommendations from the Liberal Democratic Party (LDP) Parliamentary Association for the Promotion of Blockchain, submitted to Minister Katayama on June 1, 2026, have also suggested doubling the leverage cap for retail crypto derivatives. This association, which includes LDP member Junichi Kanda, is also advocating for the expansion of yen-denominated stablecoins across the Asian market to foster wider blockchain utility.
SBI Holdings prepares local Bitcoin and XRP products
Financial giant SBI Holdings is currently positioned at the forefront of the upcoming ETF market. In filings originally revealed in May, the company detailed plans for a dual-asset ETF offering regulated exposure to both Bitcoin and XRP. This product leverages SBI’s long-standing institutional relationship with Ripple, the entity behind the XRP cryptocurrency, to provide a diversified entry point for Japanese investors.
Beyond standard spot funds, SBI Holdings has proposed a hybrid investment trust that combines traditional and digital assets. This structure involves a 51% allocation to gold-based ETFs paired with a 49% allocation to crypto-asset ETFs. The hybrid model is specifically designed to attract conservative institutional and retail investors who may be wary of direct volatility involving Bitcoin prices and other high-growth digital assets.
Market competition and asset management targets
The entry of major financial groups into the ETF space is expected to be highly competitive. SBI Securities and Rakuten Securities are both anticipated to begin retail sales of these products once the FIEA amendments take effect. SBI Holdings has set a public target to secure approximately ¥5 trillion (roughly $32 billion) in assets under management (AUM) within three years of launching its ETF suite.
Other major financial institutions, including Nomura Holdings, are also expected to develop competing crypto-linked products to challenge SBI’s first-mover advantage.
While firms like Grayscale continue to amend ETF filings in the United States, Japan’s move to treat crypto as a financial product through the FIEA could provide a more streamlined path for local banks and brokerages to offer digital asset exposure to their clients via the Tokyo Stock Exchange.
Broadening the scope of Japan’s blockchain strategy
The drive to legalize crypto ETFs is only one part of the LDP’s broader digital asset strategy. The Parliamentary Association for the Promotion of Blockchain has urged the government to support central bank digital currencies (CBDCs) and expanded uses of on-chain technology.
During a press conference in early June, Junichi Kanda emphasized that Japan must lead the expansion of on-chain finance across Asia to remain competitive.
To support this regulatory evolution, the FSA is also planning to amend specific enforcement orders under the Investment Trust Act by 2028. These updates are intended to provide a cleaner legal path for investment managers to hold digital assets within protected fund structures.
As the government finalizes these rules, the focus remains on providing Japanese investors with a compliant and clear gateway to the global cryptocurrency market.