Nomura and other Japanese financial institutions jointly call for the opening of Bitcoin and Ethereum ETFs.

Financial institutions including Mitsubishi UFJ Trust and Banking Corporation (MUFG), Sumitomo Mitsui Financial Group, Nomura Securities, and SBI have jointly proposed to the government to open up ETFs for Bitcoin and Ethereum, and have called for a review of the tax system for cryptocurrencies, including separate taxation of income.

Increased Acceptance of Cryptocurrency Investments by Japanese Investors

Several financial institutions in Japan, including major trust banks such as Mitsubishi UFJ Trust and Sumitomo Mitsui Trust, cryptocurrency exchanges like bitFlyer, as well as brokerage firms like Nomura Securities and SBI Securities, have jointly proposed that the significant market value and "stable record" of cryptocurrencies such as Bitcoin and Ethereum make them suitable for investors to "accumulate assets in the medium to long term." The proposal analyzed the current status of Japanese investors in cryptocurrency investments, with cryptocurrency investment ranking rising from 15th place in 2021 to 8th place in 2024, and the percentage increasing significantly from 0.8% to 7.3%. Investors in the 30-40 age group are the largest group.

Recommendation to Launch Bitcoin and Ethereum ETFs

The U.S. Securities and Exchange Commission (SEC) approved the listing of a Bitcoin spot ETF in January and an Ethereum spot ETF in July. However, under Japanese regulations related to investment trusts and investment corporations, investment trusts cannot offer crypto assets, and the Financial Services Agency of Japan has not approved related delegated trading. This prevents Japanese investors from legally purchasing crypto ETFs within Japan.

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The joint proposal by several financial institutions in Japan stated that the significant market value and "stable record" of cryptocurrencies like Bitcoin and Ethereum make them suitable for investors to "accumulate assets in the medium to long term," and they hope that government agencies will open up high-market-value cryptocurrencies like Bitcoin and Ethereum.

Call for Tax-Related Reforms

Furthermore, the document also calls for a review of the cryptocurrency tax system, including separating taxation of income.

In Japan, cryptocurrency trading taxes mainly come from capital gains and income, with high and complex tax rates. Because cryptocurrency capital gains are considered "miscellaneous income," they are included in personal income tax rates, ranging from 5% to 45%, plus an additional 10% local tax. For high-income individuals, this means more than half of their profits are taxed, whereas trading stocks only incurs a 15% national tax and 5% local tax.

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However, the Democratic Party of Japan (DPP) recently proposed a tax reform plan to reduce the capital gains tax on cryptocurrencies to 20%. Whether this policy will be implemented remains to be seen.