Japan Talks Bitcoin ETF, Ignores Futures Package

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As reported by the news outlet Bloomberg today, the financial regulator in Japan has abandoned its plans to allow Bitcoin futures but will consider the possibility of an exchange-traded fund (ETF) based off the new asset class.

The source cited someone who was familiar with the development as saying that the Financial Service Agency (FSA) was “gauging industry interest in ETFs”. This comes after recent developments show that the regulator has decided against the decision to revise the nation’s security law that would have provided an opportunity for cryptocurrency futures and options to be listed on major financial exchanges. The report suggested that this change came “after concluding that such products would achieve little besides stoke speculation”.

This may have cut short the expectations of a few of those expecting Bitcoin futures to be in effect at the passing of the revised law.

Last month, the financial regulator was reported to have received as many as 190 cryptocurrency license applications from exchanges after granting the local crypto sector a self-regulatory status under the supervision of Japan Virtual Currency Exchange Association (JVCEA).

According to the news outlet, the new development, however, places Japan in contrast to the US, as the latter may permit the trading of physical Bitcoin futures, whereas Japan is leaning more in favor of ETFs. Many ETFs have been proposed to the financial regulator in the US, without any positive outcome till date.

The introduction of the different derivative instruments is aimed at introducing new players from the institutional class investors. However, this has proven to be a rather slow convention. Reports from exchange data suggest that the institutional demand from the pioneers of the asset class derivative market Cboe Global Markets Inc and CME Group Inc have fallen short of expectations and waver around USD 81 million after a year-long run.

2018 has been reckoned as the year of the bear, after the introduction of Bitcoin derivatives in late 2017 may have propelled the cryptocurrency markets to new highs. The year 2019 has been filled with enthusiasm as expectations of more institutional involvement to restore the performance of the market peaking.


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