Japan’s ruling Liberal Democratic Party (LDP) is urging the government to establish a legal framework for trading cryptocurrency exchange‑traded funds (ETFs), according to a Reuters report.
The party’s blockchain promotion panel submitted the proposal to Finance Minister Satsuki Katayama, also recommending that the state encourage the use of yen‑denominated stablecoins.
The proposal argues that crypto‑ETFs would give investors a straightforward way to gain exposure to digital assets.
In April, the cabinet approved a draft amendment classifying crypto as a financial product rather than merely a payment tool.
With this change, Japan would join markets such as the United States and Hong Kong in offering ETFs that provide crypto exposure without requiring investors to purchase or store the underlying tokens.
Efforts are already under way to develop and promote yen‑based stablecoins—digital tokens pegged to the value of a traditional asset, such as a fiat currency.
The global stablecoin market, worth roughly $315 billion, is dominated by dollar‑pegged tokens, raising concerns among policymakers outside the U.S. about the potential for dollar dominance to bypass local banking and payment systems.