Japan pension fund to allocate 1% of assets to crypto

The National Business Enterprise Pension Fund, a Japan-based fund covering 1,200 small- and mid-sized companies, announced it will allocate about 1% of its assets to crypto starting in FY2026. The Japanese-based firm has over 20,000 participants and manages over 21.3 billion yen. 

The Japanese-based pension fund will allocate 1% of its total assets to digital assets through a passive fund that tracks a basket of cryptocurrencies. The digital assets portfolio will be managed by a large hedge fund rather than the pension fund itself. 

Analysts view this step as a significant milestone for crypto. Over the years, the Japanese Government Pension Investment Fund has toyed with the idea of investing in Bitcoin. This milestone could be the final trigger, exposing the trillion-dollar pension industry to Bitcoin and other digital assets. 

Japanese pension fund turns to crypto for currency diversification

According to reports, the Japanese pension fund held over 80% yen, 15% dollars, and 5% other currencies in its currency portfolio in the fiscal year 2025. For FY2026, the firm will cut its exposure to yen, reducing the allocation to 70% and allocating the remaining 10% to currencies in developed markets, with 5% split across emerging market currencies, gold, and crypto. 

The chief investment officer, Kiguchi Aitomo, justified the move, citing the continuous weakening of the U.S dollar as a reason for diversification. The decision is a unique twist on how institutions view Bitcoin and other cryptocurrencies, which have been widely accepted as speculative assets. 

According to the CIO, the fund isn’t necessarily betting on Bitcoin as an appreciative asset. It is treating Bitcoin as a currency, just like the USD, and adding it to its portfolio as one of the multiple currencies serving as a hedging tool. The fund highlighted Bitcoin’s near-zero correlation with the dollar as a source of resilience against currency depreciation. 

Kiguchi Aitomo revealed that the fund had been studying Bitcoin for over six years before deciding to allocate funds to it. He argued that the crypto industry has matured and now has a broader base of investors. The pension fund is reportedly also considering funds that pursue arbitrage strategies across multiple cryptocurrencies.

Japan plays catch-up in crypto regulation

Osaka Exchange, a subsidiary of Japan Exchange Group, has said it plans to launch Bitcoin futures in 2028, timed to coincide with the expected domestic approval of spot Bitcoin ETFs. Exchange president Akira Tagaya told Nikkei that once spot ETFs are cleared, futures must follow suit.

The spot-ETF approval itself depends on the Financial Services Agency revising investment trust rules to formally classify crypto as a “specified asset” that funds are allowed to hold, a change the FSA is targeting for 2028.

Another bill reclassifying crypto as a financial instrument under Japan’s Financial Instruments and Exchange Act, rather than treating it under the payment services law as it is now, cleared the lower house of the Diet on June 11 and is headed to the upper house.

If it passes, crypto gains would shift from being taxed as miscellaneous income at rates up to 55% to a flat 20% separate self-assessment rate, the same treatment stocks already get.

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