A new era is dawning in Japan where the cryptocurrency market will become more closely intertwined with traditional finance. Two of the country's largest online brokerage firms, SBI Securities and Rakuten Securities, are preparing to offer cryptocurrency mutual funds once the regulatory framework is finalized. According to Nikkei Asia, these products will allow investors to access crypto assets like Bitcoin and Ethereum through their existing brokerage accounts. Currently in Japan, individual investors typically need to open a separate exchange account or use a wallet to buy cryptocurrencies. The new mutual fund model could make this process more familiar. Instead of directly buying cryptocurrencies, investors will be able to take positions through fund units based on these assets. This will make crypto investing more similar to buying stocks or mutual funds.
SBI Securities' plan is based on distributing products developed by its group company, SBI Global Asset Management. The company's product portfolio is expected to include mutual funds and ETFs linked to liquid assets such as Bitcoin and Ethereum. The SBI group aims to manage the entire process internally, from product development to distribution. Rakuten Securities is similarly moving forward within its own group structure. Products to be developed by Rakuten Investment Management are planned to be directly buyable and sellable through Rakuten's smartphone application. This approach could make access to crypto more practical, especially for individual users who invest through mobile applications. It's not just SBI and Rakuten; other major financial institutions in Japan are also not shying away from this area. According to a Nikkei survey of 18 major brokerage firms, 11 companies stated they would consider offering crypto investment funds once regulations become clearer. These companies include prominent names such as Nomura Securities, Daiwa Securities, and Mizuho-affiliated Asset Management One.
SMBC Group is also reportedly forming an in-house working group on the subject. Behind this interest are regulatory steps taken by the Financial Services Agency of Japan (FSA). The FSA aims to amend the implementing regulations of the Investment Partnerships Act to add crypto assets to the list of "certain assets" that investment funds can hold. This process is expected to be completed by 2028.
Activity on the regulatory side
In parallel, the Japanese government approved a bill in April that would classify cryptocurrencies as financial products rather than means of payment. If the bill passes parliament, the new regulation could come into effect in the 2027 fiscal year. Thus, crypto assets will be brought under a regulatory framework closer to financial instruments such as stocks and bonds.
These preparations in Japan coincide with the increasing global interest in crypto ETFs. In the US, spot Bitcoin ETFs were approved in January 2024, after which these products became an important entry point for institutional and individual investors. According to SoSoValue data, the net assets of spot Bitcoin ETFs in the US have exceeded $100 billion. While Japan is proceeding more cautiously in this area, it is seen that large financial institutions are starting to take positions as regulatory uncertainty decreases. Crypto mutual funds can provide a significant convenience for Japanese individual investors. Users with an SBI or Rakuten account can access assets such as Bitcoin and Ethereum without opening a new crypto exchange account. Having regulated financial groups handle custody, reporting, and transaction processes can also strengthen the perception of trust. However, this structure is not the same as directly owning cryptocurrency. Instead of holding Bitcoin or Ethereum in their own wallets, investors will own funds based on these assets. Therefore, factors such as management fees, custody structure, and counterparty risk will determine the attractiveness of the products.
