pafin Inc. participating as a member of the 'Japan Cryptocurrency ETF Study Group,' proposing three reforms, including regulatory changes
pafin Inc. (Co-chairman: Amin Azmoudeh and Gaku Saito, hereinafter “pafin”), which operates web3-related businesses such as "cryptact" and "defitact", announced its participation in the "Japan Cryptocurrency ETF Study Group." This study group is comprised of cryptocurrency exchanges, securities firms, asset management companies, trust banks, as well as legal and tax experts. Along with other members of the study group, pafin has published a proposal titled "Proposals for the Establishment of Cryptocurrency ETFs in Japan."
Background and Purpose of the Proposal
Major cryptocurrencies, including Bitcoin, have demonstrated characteristics as assets conducive to medium and long term wealth creation, based on their market capitalization and performance. In Japan, the ownership of spot cryptocurrencies is becoming more widespread, with an increasing trend towards long-term holding. This suggests that these assets may be considered suitable for inclusion in broader investment portfolios by the public.
Meanwhile, abroad, including in the United States, there has been an expansion in the introduction of ETFs (Exchange-Traded Funds) that include cryptocurrencies as investment assets. However, in Japan, the current legal framework does not include cryptocurrencies as specific assets eligible for investment trusts. As a result, it is not possible to establish ETFs that include cryptocurrencies as underlying assets in Japan.
This proposal aims to organize the key issues related to the creation of cryptocurrency ETFs in Japan. It also serves as a collective consensus* of the study group members to propose the necessary institutional reforms required to enable the establishment of such ETFs in the domestic market.
Content of the Proposal
- The institutional frameworks should be developed to enable the establishment of cryptocurrency ETFs.
- Cryptocurrency ETFs and spot cryptocurrency trading should be subject to separate taxation (declaration-based taxation).
- Discussions on the establishment of cryptocurrency ETFs should prioritize major cryptocurrencies.
pafin’s Co-CEO Gaku Saito, who has long overseen tax reform proposals for cryptocurrencies as the Chair of the Tax System Review Committee at the Japan Virtual and Crypto Assets Exchange Association (JVCEA), has joined this study group, given the importance of tax-related discussions in the context of creating cryptocurrency ETFs.
Going forward, pafin remains committed to contributing to the further development of the cryptocurrency industry, including the promotion of cryptocurrency ETFs and spot cryptocurrency trading.
For more details about the proposal, please refer to the following (Japanese only):
“Proposals for the Establishment of Cryptocurrency ETFs in Japan”
*This proposal represents the collective consensus of the study group members and does not necessarily reflect the opinions of each individual member or the industry as a whole.
Contact for public relations and media/press coverage-related inquiries
pr@pafin.com