According to Bloomberg, Japan’s financial regulatory authority is considering allowing cryptocurrency-based exchange-traded funds (ETFs) that track the asset class.
However, it has decided to abdandon any plans to permit bitcoin futures or ethereum options in one of the biggest cryptocurrency markets globally. As Bloomberg points out, “this is another setback for investors betting on institutional demand to help end a brutal year-long selloff.” But allowing ETFs tracking digital assets in Japan could whet the appetite of retail investors.
An anonymous source close to Japan’s Financial Services Agency and who understands its way of thinking told Bloomberg that the organisation is gauging industry interest in ETFs “with a view to potentially giving the instrument the green light to trade on domestic markets.”
By contrast, the USA has been seen as “risk averse” regarding ETFs, but allows bitcoin futures trading, something that Japan has rejected. This, Bloomberg notes, came about due to the Japanese regulator “concluding that such products would achieve little besides stoke speculation.”
The desire for ETFs is mixed around the world. Some crypto advocates believe ETFs would “help Bitcoin’s image and popularity,” whilst others within the industry think, “the increased speculation and lack of physical Bitcoin ownership involved would have a detrimental effect, “ says Cointelegraph.
In the USA, there is some speculation that the government shutdown, which so far doesn’t seem to have an end in sight, might lead to the Securities and Exchange Commission (SEC) giving automatic approval to an ETF. Jake Chervinsky, a securities lawyer said, however that he didn’t see the SEC changing its mind any time soon: “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,” adding, “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, we will see more bitcoin futures trading in the USA, with the Bakkt platform ready to launch one in January, and the NASDAQ has said it will copy this at some point during 2019.