Financial institutions including Mitsubishi UFJ Trust, Sumitomo Mitsui, Nomura Securities, and SBI have jointly proposed that the government open Bitcoin and Ethereum ETFs and called for a review of the crypto tax system, including the separation of income taxation.
Japanese investors' acceptance of cryptocurrency investment has increased.
A proposal from several Japanese financial institutions, including Mitsubishi UFJ (MUFG) and major trust banks like Sumitomo Mitsui, bitFlyer cryptocurrency exchange, and brokerage firms like Nomura Securities and SBI Securities, states that the massive market value and 'stable record' of cryptocurrencies like Bitcoin and Ethereum are suitable for investors to 'accumulate assets in the medium to long term.' The proposal analyzes the current state of Japanese investors in cryptocurrency investment, showing that the ranking of cryptocurrency investment has risen from 15th in 2021 to 8th in 2024, with the proportion increasing significantly from 0.8% to 7.3%. Most investors are in the 30-40 age group.
It is suggested to open Bitcoin and Ethereum ETFs.
The U.S. Securities and Exchange Commission (SEC) opened the listing of Bitcoin spot ETFs in January and released Ethereum spot ETFs in July. However, according to Japanese investment trust and investment corporation laws, crypto assets cannot be provided by investment trust funds, and the Japanese Financial Services Agency has also not approved related delegated transactions. This has prevented Japanese investors from legally purchasing crypto ETFs within Japan.
(Stubborn Financial Supervisory Commission? The Japanese Financial Services Agency similarly does not allow citizens to trade Bitcoin ETFs and prohibits delegated transactions)
This proposal from multiple Japanese financial institutions states that the massive market value and 'stable record' of cryptocurrencies like Bitcoin and Ethereum are suitable for investors to 'accumulate assets in the medium to long term.' They hope that government agencies can open up high market value cryptocurrencies like Bitcoin and Ethereum.
Call for tax-related reforms.
Additionally, the document calls for a review of the crypto taxation system, including tax separation on income.
In Japan, the taxation on cryptocurrency trading mainly comes from capital gains and income, with high and complex tax rates. Capital gains from cryptocurrencies are considered 'miscellaneous income' and are included in personal income tax rates, which range from 5% to 45%, plus an additional 10% local tax. For high-income individuals, this effectively takes away more than half of their profits, while trading stocks only incurs a 15% (national tax) plus 5% local tax.
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Recently, however, the Democratic Party of Japan (DPP) proposed a tax reform plan to reduce the capital gains tax on cryptocurrencies to 20%. Whether the policy can be implemented remains to be seen.
This article, in which multiple Japanese financial institutions including Nomura jointly call for the opening of Bitcoin and Ethereum ETFs, first appeared in Chain News ABMedia.
