Japan opens door to retail crypto investing as brokerages build in-house trusts

Japan is preparing to make cryptocurrency investing easier for ordinary people as some of the country’s biggest brokerage firms move to launch crypto investment trusts and exchange-traded products. 

SBI Securities and Rakuten Securities are already developing in-house crypto investment products, while other major financial companies are waiting for the government to finalize new regulations. 

The move could reshape how retail investors in Japan access digital assets like Bitcoin and Ethereum, allowing them to invest through regular securities accounts rather than crypto exchanges.

Why are Japanese brokerages rushing into crypto trusts?

11 major securities firms are considering implementing cryptocurrency investment trusts, once the legal framework is approved, according to a recent survey by the Japanese financial media organization, Nikkei. 

Those firms include Nomura Securities, Daiwa Securities, SMBC Nikko Securities, Mizuho Securities, and Monex. 

Japan’s Financial Services Agency has been conducting preliminary exploration of whether to allow cryptocurrencies into the formal regulated investment system for some time, and plans for their implementation are now moving closer to fruition. 

The agency is developing additional changes to the rules governing investment trusts and exchange-traded funds. The Authority is to update the Enforcement Order under the Investment Trust Act by 2028 to recognize cryptocurrencies as assets that can be considered investments and investment funds. 

The change matters because, in Japan, purchasing crypto traditionally requires investors to register crypto accounts and manage digital wallets. For most people, especially older, less tech-savvy investors, this whole process has been difficult and risky. 

With crypto investment trusts, people can buy exposure to cryptocurrencies just as they do in brokerage accounts, much like buying stock or bond funds. 

Analysts hope that such sales will expand the retail market in Japan’s crypto sector. 

Key elements of product development will be SBI Global Asset Management, a section of the SBI Group. The group’s plans include issuing ETFs and investment trusts tied to highly liquid cryptocurrencies such as Bitcoin and Ethereum. 

Meanwhile, Rakuten Securities is developing products through the Rakuten Group ecosystem through its Rakuten Investment Management. 

The company aims to place crypto investment trusts on smartphone apps and reach retail users who already manage traditional investments on their phones.

What changes are regulators planning?

Japan’s government is also preparing broader legal changes to attract investors in cryptocurrencies further. 

On April 10, the government approved a bill that would formally regulate cryptocurrencies as financial products. If passed during the current parliamentary session, the new rules will be applicable in fiscal year 2027. 

A significant part of the proposed changes concerns taxation. For now, profits from cryptocurrency trading in Japan are subject to tax rates of up to 55%, based on income. The financial benefits and losses from crypto investments under the proposed reforms could instead be taxed at a flat 20%, much like stocks and bonds. 

It would eliminate one of the main barriers to traditional investors entering the crypto market, industry observers say. 

Japan has long been regarded as one of the world’s most regulated crypto markets, but steep taxes have pushed traders toward platforms in distant countries. 

The revised law would also bolster investor protection measures. There are also plans to tighten rules governing how assets are managed and security is protected, following years of high-profile exchange hacks. 

Trust banks and financial institutions handling cryptocurrencies would come under closer scrutiny and face more stringent operational requirements. 

Already, financial interests are getting ready. SMBC Group has set up a cross-group task force to study crypto investment products. Asset Management One, a unit under Mizuho Financial Group, has also launched its probe into the market.

How does Japan compare with global crypto markets?

Japan’s push toward regulated crypto investment products follows similar developments in other major markets.

The global cryptocurrency market capitalization stood at about $2.55 trillion at the end of April, showing that digital assets remain a major part of global finance despite market volatility.

In the United States, spot Bitcoin ETFs began trading in 2024 after approval from the U.S. Securities and Exchange Commission. Those products attracted billions of dollars in inflows and helped drive wider institutional adoption of crypto investments.

Similar crypto ETFs are already available in countries such as Canada, Hong Kong, and Australia.

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