A group of Japanese financial institutions urge the government to focus on major tokens such as Bitcoin and Ether in talks of allowing exchange-traded funds for cryptocurrencies.
According to a Bloomberg report, a group of Japanese companies lodged a series of proposals on Oct. 25 with a title that translates into “Recommendations for the composition of crypto assets ETFs, etc. in Japan”. The country remains on the fence about whether it will permit the instrument.
In the group’s proposal, it states that the majority of voices agree that if Japan decides to allow crypto ETFs, they would prioritize Bitcoin and Ethereum for ETFs. Furthermore, they are also calling for a review of Japan’s taxation system, specifically recommending to separate tax on income earned.
The proposal states that the large market value of the two cryptocurrencies and their “stable track record” make them attractive to investors who wish to “build up assets over the medium to long term.”
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The group is made up of major financial institutions including trust banks such as Mitsubishi UFJ Trust and Banking Corp. and Sumitomo Mitsui Trust Bank, crypto exchanges such as bitFlyer Inc, and brokerages like Nomura Securities and SBI Securities.
In the proposal, the group placed a disclaimer that the views reflected in the proposals are a consensus from group members instead of individual opinions.
On Oct. 23, investment director at Sumitomo Mitsui Trust Asset Management, Oki Shiozawa stated that Japanese regulators remain cautious on spot crypto ETFs. This is due to the fact that Japan’s Financial Services Agency, the government body that approves financial products, is still very conservative.
Vice-president of the Japan Cryptoasset Business Association, Keisuke Kimura, echoes this sentiment. He said that the country faces “regulatory constraints” as well as negative public perception towards crypto because of past incidents such as Mt. Gox and DMM, which led to heavy losses for investors.
Though, some Japanese firms remain hopeful towards crypto. Franklin Templeton and SBI Holdings partnered in July to develop new products, including crypto ETFs. Nomura has also rolled out Bitcoin adoption fund for institutional investors.
On the other hand, there has been a global shift towards crypto ETFs. The U.S. approved its first spot Bitcoin ETFs in January, followed by Ethereum ETFs in July. Countries in the Asia-Pacific region like Hong Kong and Australia, have followed suit by approving their own spot crypto ETFs.
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