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Japan's Financial Services Agency is ready to approve crypto exchange-traded funds (ETFs)

Jan 17, 2019

At the moment the Financial Services Agency (FSA) of Japan is estimating the industry’s interest in ETFs (exchange-traded funds) tracking cryptocurrencies.

Liberal Democratic Party, Japan’s main ruling party, is planning to submit a draft law by March 2019, that, among other things, can potentially include changes to existing financial rules regarding cryptocurrency. The above-mentioned bill is created in order to increase the level of self-regulatory administration of crypto-industry and classify a lot of ICO tokens as securities, the bill may come into force by 2020.

The FSA has abandoned its plans to include permission for trading crypto derivatives on financial exchanges due to its concerns that this only encourage speculation.

Recent increase of interest in and analysis of Japan crypto space is also tied to a hack of the Coincheck exchange in January, which resulted in around $533 million in cryptocurrencies equivalent being stolen.

Many market observers are considering crypto ETFs as a means to bring institutional capital into crypto segment, nevertheless, not all agree with this idea. ETFs remain very important for many in the crypto industry who believe that exchange-traded funds might grant crypto products more authority in the eyes of investors, when making them more available to those who previously had a brokerage account.

In the U.S., certain number of individuals are preparing to initiate such crypto products, although the SEC (Securities and Exchange Commission) has not yet allowed any of it. In August 2018, SEC has dropped 9 bitcoin ETF applications in order to prevent fraudulent and manipulative acts and practices.

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