Japan Eyes First Bitcoin ETF, Targets Fiscal 2028 Under New Investment Rules

Japan is moving toward a regulatory overhaul that could pave the way for the country's first Bitcoin exchange-traded fund (ETF) as early as fiscal 2028, bringing digital assets closer to the rulebook that governs traditional financial products. According to reports, the Financial Services Agency (FSA) is preparing revisions to investment fund regulations after lawmakers shifted oversight of spot cryptocurrencies to the Financial Instruments and Exchange Act. That change would place crypto assets under the same regulatory framework as securities, replacing the current approach centered on the Payment Services Act. The planned framework is intended to give investment firms clearer legal footing to launch regulated cryptocurrency investment products, while also strengthening investor protections and broadening access to compliant digital-asset exposure. Finance Minister Satsuki Katayama has recently signaled the government remains on track to legalize cryptocurrency ETFs, mirroring adoption trends in other major markets. Asset managers are reportedly assessing potential Bitcoin ETF offerings for Japanese investors. Market estimates suggest such products could draw up to 3 trillion yen in inflows by fiscal 2028 if approved. Institutional demand is also shaping the policy momentum. Pension funds have begun adding crypto exposure as part of diversification efforts. Aiyu Kiguchi, executive director of investment management at the National Business Pension Fund in Okayama, said cryptocurrencies can help diversify portfolios due to their relatively low correlation with the U.S. dollar. The fund manages about 21.5 billion yen for roughly 1,200 small and medium-sized businesses and has allocated an initial 1% of its portfolio to crypto-related funds managed by overseas hedge funds. Japanese financial groups are positioning for a regulated ETF market as well. SBI Holdings has proposed several cryptocurrency ETF products, including a dual-asset fund offering exposure to both Bitcoin and XRP. SBI has also set a goal of reaching about 5 trillion yen in assets under management within three years, betting that regulated crypto investment products will attract rising interest from institutional and retail investors. Industry participants say aligning cryptocurrencies with traditional investment rules could make the market more familiar for financial institutions and encourage participation from established asset managers. If the reforms move forward, Japan would join other major markets offering regulated Bitcoin ETFs, expanding investor options while reinforcing the country's role in the global digital-asset industry.