Japan’s FSA Reportedly Honing In On Crypto ETF Decision

Japan’s FSA Reportedly Honing In On Crypto ETF Decision

Japan’s Financial Services Agency (FSA), the nation’s top financial regulator, is apparently considering the greenlighting of crypto exchange-traded funds (ETFs) in the nation. The crypto ETF buzz comes after the agency effectively ruled against cryptocurrency derivatives being listed on mainstream Japanese exchanges in December 2018. 

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A Crypto ETF Boom Could Be Nigh in Japan, But We’ll Have to Wait and See

Japan’s FSA is eyeing approval for crypto ETFs in the nation, an anonymous source within the agency has reportedly told Bloomberg.

The development comes after the FSA declined in Dec. 2018 to modify domestic legislation so as to allow crypto deriviatives, like futures and options products, in Japan.

An ETF, or exchange-traded fund, is a security that is used to track the value of a basket, a bond, a commodity, or a stock index and is tradeable on exchanges. ETFs are commonly cited as an avenue toward crypto adoption as such funds would allow mainstream traders to speculate on the cryptoeconomy without having to personally possess digital assets.

Japan’s overall ETF market is approximately 10-times smaller than America’s, but as the nation currently has one of the most bustling markets for cryptocurrencies, the Asian powerhouse is poised to be at the vanguard of crypto ETFs if the FSA decides it’s okay to go full-steam ahead.

Of course, the agency could ultimately decline to pursue such ETFs for now, but in the very least the regulator appears to be exploring the launch of these funds seriously.

Until an official decision is made by the body, however, the investment environment in Japan will stay as is. will continue to track the situation as it develops.

The Ever-Elusive Crypto ETF

A crypto ETF may still be a ways off in the U.S., but traction seems to be slowly accruing around the world for these types of funds.

Last fall, London-based technology company Amun launched a “crypto basket ETP,” or exchange-traded product, on the Swiss stock market, the Swiss Exchange (SIX).

That ETP, which tracked the performance of bitcoin, ether,  XRP, and litecoin to start, is rebalanced monthly according to respective individual performances in the cryptoeconomy.

“With one purchase, investors can now access 75 percent of the crypto market and the monthly rebalances ensure we capture the evolution of the asset class,” Amun CEO Hany Rashwan said at the time.

So, while America’s Securities and Exchange Commission (SEC) has shot down all crypto ETF proposals to date citing concerns of manipulation and volatility, Japan may be the first nation to follow in Switzerland’s stead in allowing the marriage of exchange-traded instruments with the realm of cryptocurrencies.

Whether these products take off in popularity in the years ahead still remains to be seen.

What’s your take? Should Americans expect a crypto ETF in the U.S.A. sooner rather than later? Or is such an ETF a pipe dream for now? Let us know in the comments section below. 

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