FSA's Policy Shift Enables Japan's Crypto Fund Boom

Japan's Top Fund Managers Move Toward Crypto-Fund Launch

Japanese asset managers with a combined $2.5 trillion in assets under management have signaled interest in launching crypto investment products, signaling a potential shift in the country's traditionally cautious approach to digital assets. Mitsubishi UFJ Asset Management, Nomura Asset Management, and other major firms are preparing to offer crypto trusts to both retail and institutional investors, pending regulatory approval. This development comes as Japan's Financial Services Agency (FSA) explores reclassifying cryptocurrencies as financial products and reducing tax rates on crypto profits.

The move reflects growing global momentum in crypto adoption. Six of Japan's largest asset managers, including SBI Global Asset Management and Daiwa Asset Management, have formally expressed interest in crypto funds. The FSA is reportedly considering allowing investment trusts that incorporate cryptocurrencies, a policy shift that could accelerate the country's integration into the global crypto market.

Regulatory clarity is a critical factor. The FSA plans to reclassify Bitcoin, Ethereum, and over 100 altcoins as financial products, subjecting them to insider trading rules and a proposed 20% capital gains tax—a significant reduction from the current 55% rate on "miscellaneous income". These reforms, expected to be legislated in 2026, aim to align Japan's crypto framework with stock market rules and attract institutional investors according to analysis.

The stimulus-driven economic environment also plays a role. Prime Minister Sanae Takaichi's recent 21.3 trillion yen ($135.4 billion) stimulus package, the largest since the pandemic, underscores Tokyo's focus on fiscal expansion. While the package primarily targets inflation relief and infrastructure, it highlights a broader policy trend of economic experimentation, which could create favorable conditions for crypto innovation.

Market participants remain cautious. The FSA's deregulatory efforts, including allowing banks to hold cryptocurrencies for investment, have not yet materialized. Meanwhile, the USD/JPY pair has fallen to 10-month lows amid concerns over Japan's expanding fiscal deficit from the stimulus.

The timing of these developments coincides with global crypto milestones. The U.S. approval of Bitcoin spot ETFs in 2025 has heightened expectations in Japan for similar products. 21Shares, a European crypto ETF issuer, recently launched a leveraged Dogecoin ETF in the U.S., further demonstrating the sector's institutionalization.

Japanese crypto firms and investors are closely watching whether the FSA will finalize tax reforms and fund approvals. Analysts note that the success of crypto funds will depend on balancing innovation with Japan's reputation for financial stability.