Japan may become the first country to approve the first cryptocurrency-pegged exchange-traded fund at its regulatory level.

Japan vs USA

The Financial Services Agency of Japan (FSA) is exploring the possibility to approve the launch of the crypto ETF, considering such a tool quite interesting to the market participants, Bloomberg reports, citing anonymous sources. Currently, the regulator is currently gauging industry interest in ETFs tracking digital currencies, according to a person familiar with the agency’s thinking who requested anonymity discussing private plans.

In the US, all attempts to launch a crypto ETF have so far failed. The US Securities and Exchange Commission (SEC) repeatedly refused to approve it or postponed its decision on applications filed for crypto-ETFs launch.

At the same time, the Japanese financial regulator considered futures contracts tied to cryptocurrencies to be a too risky asset class and abandoned the idea to approve their launch. In December 2018, the FSA refused to amend the national law on securities, which would allow placing options and futures contracts for cryptocurrency on legal grounds.

This position of the Japanese authorities is exactly the opposite to the opinion of the US regulators, which did not prevent the desire of several exchange platforms, including the Chicago-based CBOE and CME, to launch bitcoin futures in December 2017.

The United States are waiting for Bitcoin ETFs

In the summer of 2018, the SEC rejected 9 applications for the creation of bitcoin ETFs. SEC explained its decision by mentioning high risks of fraud and manipulation related to the cryptocurrency market. According to analysts, the most likely candidate to receive permission from the US regulator is the bitcoin ETF of VanEck and SolidX.

On June 20, 2018, Cboe BZX trading platform submitted an application to the SEC with a proposal to amend the current rules regarding the launch of exchange-traded funds (ETF) in order to be able to launch bitcoin ETF.

According to the US-based lawyer from Kobre & Kim, Jake Chervinsky, the SEC will extend the period as long as possible.

“I can’t imagine the SEC will approve the first ever bitcoin ETF without taking all the time allowed by law.”

In the case of the Cboe BZX, VanEck and SolidX application, the regulator has the right to postpone the decision until February 21, 2019.