On January 7, an anonymous source told Bloomberg that Japan’s financial regulator, the Financial Services Agency (FSA), is considering approving a Bitcoin ETF (exchange-traded fund).
According to the prominent news publication, a person familiar with Japan’s financial watchdog and their stance on cryptocurrencies says that the FSA is ascertaining if there is interest in a Bitcoin ETF trading in the country’s domestic markets.
No to Bitcoin Futures, a Possible Yes to Bitcoin ETF
This comes just less than a month after the financial watchdog shut down plans for cryptocurrency futures due to abandoned efforts to revise Japan’s securities law. As Bloomberg reports, the FSA feels that cryptocurrency options and futures would only fuel speculation.
It appears that Japan’s stance on cryptocurrency trading products is in direct contrast to that of the United States. In comparison, the U.S. has already approved Bitcoin options and futures but is hesitant on approving a Bitcoin ETF.
Despite the U.S. stance on approving an ETF, there is some speculation that the on-going government shutdown in Washington could lead to the Securities and Exchange Commission (SEC) automatically approving an ETF if they fail to make a decision by the deadline.
However, Jake Chervinsky, a government lawyer familiar with the legalities of the SEC, shut down this speculative thought in a tweet:
Not really. It's true that a proposed rule change is auto-approved if the SEC doesn't make a decision by the deadline, but in reality it would never happen. The SEC has enough staff to put out a decision, even if it's a one-pager saying "denied for reasons to be explained later."
— Jake Chervinsky (@jchervinsky) January 6, 2019
Japan’s Self Regulation of the Crypto Industry
As we previously reported, Japan’s Financial Services Agency has turned over the responsibility of overseeing cryptocurrency exchanges to the Virtual Currency Exchange Association (JVCEA).
Again, this move is contrary to what regulators are doing in the United States, and allows for the industry to better foster innovation in this fast-moving space.
Moreover, the FSA has also put forward some proposals to place the majority of initial coin offerings (ICOs) under the country’s securities law, which would require that ICO issuers register with the FSA. These proposals will likely be contained in a bill that will be submitted before the current parliamentary session ends in 2 months’ time.
Overall, Japan’s financial regulators are lenient with their regulations in the cryptocurrency industry. They do not want to hinder innovation; they want to foster it.
Japan’s FSA commissioner, Toshihide Endo, previously stated:
We have no intention to curb [the cryptocurrency sector] excessively. We would like to see it grow under appropriate regulation.
Bakkt Scheduled to Launch Soon
Apart from Bitcoin ETFs and Japan’s stance on regulation, the Intercontinental Exchange’s Bakkt, with their offering of physically-settled Bitcoin futures trading, is still slated to launch later this month. Nasdaq is said to be following suit sometime in 2019.
However, due to the government shutdown in Washington, there is some uncertainty as to whether the Commodities Futures and Trading Commission (CFTC) will be able to approve Bakkt in time for their launch at the end of this month.
There’s no saying how long the U.S. government shutdown will last and what effect it will have on the regulations of cryptocurrencies and crypto-related businesses and services in the United States.
Do you think a Bitcoin ETF will be launched in Japan before one is launched in the United States? Do you agree with Japan’s regulatory stance on the crypto industry? Let us know what you think in the comment section below.
