Japan’s Financial Watchdog Considers Bitcoin ETF Proposal

https://www.regulationasia.com

Japan’s Financial Services Agency (FSA) is mulling over approving Bitcoin exchange-traded funds (ETF), according to an undisclosed source cited by Bloomberg.

In a Bloomberg report published January 7, an anonymous source privy to the matter disclosed that FSA was considering testing an ETF to determine whether or not the instrument was worthy of approval for domestic trading.

Should the ETF gain the permission of Japan’s financial watchdog, this would position the country on the opposite spectrum with the U.S. where regulators are mostly risk-averse when it comes to such proposals. While the U.S. remains largely apprehensive about green-lighting ETFs, it has previously authorized trading of Bitcoin futures, a move that is in direct contrast with the FSA’s position.

The move, according to the report, can be largely attributed to the Japanese watchdog’s conclusion “that such products would achieve little besides stoke speculation.”

As it stands, ETF proposals have so far generated mixed responses within the crypto industry, with some arguing that the approval of such a proposal would boost Bitcoin’s popularity, while others in the community posited that the impact of such a proposal might be more detrimental, given the increasing speculation and lack of ownership of physical Bitcoin.

According to securities lawyer Jake Chervinsky, the stance of U.S. regulators and legislators on ETFs would most likely remain unchanged, despite rising speculations that Washington’s ongoing government shutdown could potentially result in an ETF’s automatic approval by the Securities and Exchange Commission (SEC).

As Chervinsky explained:

“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.’”

Meanwhile, the Intercontinental Exchange’s Bakkt platform is poised to launch Bitcoin futures in the U.S. market this month, a step which Nasdaq is planning on following this year.