Sumitomo Mitsui Trust Asset Management has revealed that regulators in Japan are cautious about approving spot crypto exchange-traded funds (ETFs), diverging from the more progressive approaches seen in the US and Hong Kong. Oki Shiozawa, investment director at the asset management firm, stated that Japanese authorities are currently not in a position to approve crypto ETFs. Despite Japan positioning itself as a crypto-friendly nation, high tax rates and strict regulatory constraints are hindering broader adoption. Profits from crypto investments in Japan are subject to a tax rate of up to 55%, compared to the 20% tax rate for capital gains from ETFs. Keisuke Kimura, vice-president of the Japan Cryptoasset Business Association, explained that the limitations in the country are mainly due to regulatory constraints and the public’s perception of crypto, which has been impacted by past scandals like Mt. Gox and DMM. However, some firms are preparing for potential regulatory shifts, with Franklin Templeton and SBI Holdings partnering to develop new products, including crypto ETFs. Nomura, a Japanese banking giant, has also introduced a Bitcoin adoption fund for institutional investors. While the US and other Asia-Pacific markets have approved spot Bitcoin and Ethereum ETFs, calls are growing for Japan to adopt a similar approach.