Japan is taking action to embrace crypto investment, with asset managers preparing regulated trusts under a 2026 rule change. The Financial Services Agency (FSA) plans significant reforms, including lower taxes and expanded investor protections for digital assets. This follows regulatory signals promising tax benefits and clearer legal status for cryptocurrency. 6 major asset managers are leading the charge by launching Japan’s first regulated crypto investment trusts under new securities law by 2026. The FSA’s planned reclassification of cryptocurrencies under the Financial Instruments and Exchange Act framework will facilitate inclusion in investment trusts and provide protections similar to those offered for traditional assets. This change could pave the way for a five trillion yen asset size by SBI Global Asset Management, targeting Bitcoin and Ethereum ETFs as early products. Other institutions like Nomura and Daiwa are preparing their teams for post-reform crypto strategies. The market mechanics of these new trusts require robust pricing benchmarks, reliable market access, secure custody systems, and comprehensive cybersecurity measures to protect the assets involved. Japan has a significant existing crypto user base, with approximately 13 million accounts on local exchanges. The FSA’s draft measures include regulations for custody services, and support for a joint yen-stablecoin project involving three major banks, reflecting increasing scrutiny of security risks in the cryptocurrency sector.