Japan Set to Lift Ban on Bitcoin and Ethereum ETFs with New Crypto Regulations

Japan is preparing to lift its ban on crypto exchange-traded funds (ETFs) backed by Bitcoin and Ether, as the nation’s ruling party unveils a new regulatory framework for digital assets.

Sota Watanabe, CEO of Startale Group, shared this development on March 6, revealing that the proposal aims to regulate cryptocurrencies under Japan’s Financial Instruments and Exchange Act, offering clearer guidelines for the market.

The proposed changes could open the door for crypto ETFs in Japan, enhancing local investor participation and potentially driving up market prices. As the U.S. continues to advance with its crypto-friendly policies, including a planned crypto summit, Japan is working to stay competitive in the global market by adopting more pro-crypto strategies.

Watanabe added that the proposal suggests cryptocurrencies should be categorized as a new asset rather than a security, signaling a more favorable regulatory stance. Moreover, the tax structure for crypto-related activities could be more appealing, with tax rates potentially dropping from 55% to 20%.

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This shift follows Japan’s ongoing moves towards embracing digital assets, including the country’s discussions around stablecoin usage. Japan’s SBI financial subsidiary will soon begin supporting USDC transactions, a notable departure from previous restrictions on foreign-backed stablecoins. As the nation takes further steps to regulate crypto, market observers are optimistic about the imminent introduction of crypto ETFs and the potential boost for the sector.

Alexander Stefanov