Japan is moving closer to permitting Bitcoin exchange-traded funds (ETFs), with the country’s first such product potentially arriving in 2028 if planned regulatory changes proceed, according to a Nikkei report.

The shift follows amendments approved by lawmakers that place crypto assets under the Financial Instruments and Exchange Act. The changes have prompted Japan’s Financial Services Agency (FSA) to begin revising investment-fund rules so that investment trusts and ETFs can directly hold digital assets.

The transition also moves crypto oversight away from the Payment Services Act, marking a significant change in how Japan regulates the sector. That distinction matters because ETF approval depends not only on demand for crypto exposure, but also on whether regulated fund structures are allowed to hold, value, and disclose digital-asset positions under Japan’s financial-market framework.

Bitcoin ETF Momentum Builds in Japan

Some estimates indicate that Japanese Bitcoin ETFs could attract as much as JPY 3 trillion by fiscal 2028. However, no such investment vehicle has been approved for launch. Before any product can reach the market, Japan must complete additional regulatory revisions allowing funds to offer exposure to crypto assets.

Major financial firms, including SBI Holdings and Nomura, are reportedly working on crypto investment products. Community reaction followed quickly, including an X post describing the development as a “quiet policy U-turn” for Japan, which had maintained a cautious stance toward the industry after the collapse of Mt. Gox.

A regulated spot Bitcoin ETF could give Asian investors a more accessible route to Bitcoin exposure and may influence other countries in the region, including South Korea, which often looks to Tokyo when shaping financial policy. For retail and institutional investors, such products would also separate fund-based exposure from direct crypto custody, placing access inside a familiar regulated investment wrapper rather than requiring users to hold tokens themselves.

At the same time, the new legislation strengthens penalties for unregistered crypto operators. The maximum prison sentence has been increased from three years to 10 years, while the highest fine has risen from 3 million yen ($18,500) to 10 million yen. The law also broadens disclosure requirements and introduces stricter insider trading rules.

Corporate Adoption

The regulatory push comes as corporate interest in digital assets continues to expand in Japan. Earlier this month, SBI VC Trade said more companies are adding not only Bitcoin but also XRP to their treasury holdings, as the weakening yen encourages businesses to diversify their reserves.

The exchange also reported wider use of crypto in shareholder benefit programs and rising demand for its institutional services.

Japan remains one of XRP’s strongest markets, with SBI playing an important role through its partnership with Ripple on cross-border payments. SBI recently launched Ripple’s RLUSD stablecoin after receiving regulatory approval and has filed for a product that could become Japan’s first XRP ETF.