WebX Fintech Expo Osaka - Panel on Crypto ETFs

Splendid experience to moderate the panel on Crypto ETFs at the WebX FinTech Expo in Osaka on Friday, sharing the stage with Takashi Takamura, Country Head at Franklin Templeton Japan, Tomoya Asakura, Chief Executive Officer at SBI Global Asset Management, and Eugene Cheung, Chief Commercial Officer at OSL, covering the state of Crypto ETFs around the globe as well as the outlook for Japan.

Five Key Takeaways

1. Japan is a Sleeping Giant for Crypto ETFs, But Regulatory Hurdles Remain: Japan holds immense potential with over ¥2,200 trillion in household assets, much of it in cash. Crypto ETFs are seen as a key catalyst to unlock this capital, but the country is significantly behind the U.S. and Hong Kong due to a slow regulatory process.
2. Taxation is the Key Hurdle in Japan: The single biggest obstacle is the need to change the tax classification of crypto gains from "miscellaneous income" (up to 55%) to the standard financial product rate (~20%). Without this change, a crypto ETF is not viable. The timeline for this reform is uncertain, ranging from 2025 to as late as 2027.
3. ETFs Offer Security and Convenience, Not Just Access: While Japanese investors can already buy crypto directly, ETFs are crucial for attracting mainstream and traditional investors. They solve major concerns around security (by using regulated custodians) and convenience (by allowing investment through existing brokerage accounts).
4. The Future Extends Beyond Spot ETFs to Staking and Tokenization: The evolution of digital asset products is already underway globally. The next wave will likely include ETFs that incorporate staking rewards, adding an income component. The ultimate vision is the full convergence of traditional and digital finance through the tokenization of all assets.
5. Hong Kong Provides an Innovative Blueprint: Hong Kong's rapid and successful launch of spot crypto ETFs, featuring the world's first "in-kind" creation and redemption model, demonstrates the power of a proactive, regulator-led approach. This serves as a potential model for other jurisdictions looking to integrate digital assets into their financial systems.

The State of Crypto ETFs in Japan