Japan is taking concrete steps toward legalizing exchange-traded funds based on cryptocurrencies. Speaking at the “Open QUICK 2026” seminar organized by financial information service QUICK, Finance Minister Satsuki Katayama confirmed that the government is working in this direction. The strong interest shown in similar products overseas appears to have prompted Tokyo to take action as well.
This is more than a vague statement of intent; a concrete legal change is already underway. Japan’s House of Representatives recently approved a revision that transfers oversight of spot crypto assets from the Payment Services Act, or PSA, to the Financial Instruments and Exchange Act, or FIEA. Crypto assets will now be treated as fully fledged financial products, similar to stocks and bonds. This will place them within the same framework as traditional financial instruments in areas ranging from taxation to investor protection.
Market expectations suggest that the country’s first crypto ETFs could begin trading as early as next year.
SBI’s ETF push
Japanese financial giant SBI Holdings became the first company to submit a concrete proposal in this field in May. The application proposes a dual-asset ETF that would provide regulated exposure to both Bitcoin and XRP.
SBI did not stop there. The company also proposed a hybrid investment fund combining gold and crypto assets. Under the planned structure, 51% of the fund would be allocated to gold ETFs, while the remaining 49% would be invested in crypto ETFs linked to assets such as Bitcoin.
The idea is straightforward: bring cautious institutional investors and more risk-tolerant retail investors together within the same product.
Target size and competition
SBI’s target is far from modest. The company aims to reach approximately 5 trillion yen, equivalent to around $32 billion, in assets under management within three years of the product’s launch. Setting such an ambitious target before regulatory approval has even been completed is noteworthy.
There is also a reason for the urgency. Major Japanese financial groups such as Nomura and Rakuten Securities could also enter the market, and SBI does not want to lose the first-mover advantage.
The company’s long-standing institutional partnership with Ripple also makes the inclusion of XRP in the ETF proposal more significant. It is not a coincidence, but a natural extension of a relationship that has been built over many years. SBI previously helped strengthen this partnership through concrete steps, including facilitating Ripple’s acquisition of one of Japan’s largest crypto exchanges.
Japan’s move follows similar steps taken by Hong Kong and Singapore, once again showing how Asia’s major economies are closely following one another in the development of crypto regulations.
The main question is whether SBI’s $32 billion target is realistic. For a product that has not yet been tested, it is an audacious figure. However, considering the company’s history with Ripple and Japanese investors’ interest in crypto assets, it would also be unfair to dismiss the target as entirely unrealistic.
The regulatory details expected in the coming months will provide a clearer indication of how achievable SBI’s ambitious target really is.
