- Japan is moving closer to legalizing cryptocurrency ETFs after advancing legislation that classifies digital assets as regulated financial products.
- The proposed framework could pave the way for Bitcoin and XRP ETFs as early as next year.
- Financial giant SBI is already preparing ETF products, including a Bitcoin-XRP fund and a hybrid gold-crypto investment vehicle.
Japan is taking another major step toward mainstream cryptocurrency adoption after Finance Minister Satsuki Katayama confirmed that the government remains on track to legalize cryptocurrency exchange-traded funds (ETFs).
Speaking during the Open QUICK 2026 seminar on July 10, Katayama said Japan is moving forward with plans to introduce regulated crypto ETFs following the strong performance of similar investment products in overseas markets.
If implemented, the move would make Japan one of the largest financial markets to embrace cryptocurrency ETFs, potentially opening the door for broader institutional participation.
Crypto Set to Become a Regulated Financial Product
Japan has already made significant progress toward the new framework.
The House of Representatives recently approved revisions that would shift oversight of spot cryptocurrencies from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA).
The change would officially classify cryptocurrencies as regulated financial products, placing them alongside traditional investments such as stocks and bonds. The updated framework is expected to provide clearer investor protections while creating a regulatory foundation for launching crypto ETFs.
Industry observers believe the first cryptocurrency ETFs could debut as early as next year if the legislative process continues on schedule.
SBI Already Preparing Bitcoin and XRP ETFs
Japan’s largest financial institutions are already positioning themselves for the anticipated launch.
Earlier this year, SBI Holdings proposed introducing a dual-asset cryptocurrency ETF that would provide regulated exposure to both Bitcoin and XRP. The company also outlined plans for a hybrid investment fund combining traditional gold ETFs with cryptocurrency ETFs.
Under the proposal, approximately 51% of the portfolio would be allocated to gold ETFs, while the remaining 49% would be invested in crypto ETF products. The structure is designed to appeal to both conservative investors seeking stability and those looking for digital asset exposure.
A Race to Capture Japan’s ETF Market
SBI has set ambitious targets for its planned ETF business, aiming to manage approximately ¥5 trillion (around $32 billion) in assets within three years of launch.
The company hopes to establish an early lead before other major Japanese financial institutions, including Nomura and Rakuten Securities, introduce competing crypto investment products.
SBI’s long-standing relationship with Ripple also places it in a strong position should XRP-based investment products receive regulatory approval.
Institutional Adoption Continues to Expand
Japan‘s latest regulatory efforts reflect a broader global trend as governments increasingly recognize cryptocurrencies as part of the mainstream financial system.
With spot Bitcoin ETFs already operating successfully in several international markets, Japan’s move toward regulated crypto funds could further accelerate institutional participation while providing retail investors with easier access to digital assets through traditional investment accounts.
If approved, the introduction of Bitcoin and XRP ETFs would mark another significant milestone for the country’s rapidly evolving cryptocurrency industry.
