Japan’s regulatory watchdog explores possibility of cryptocurrency ETFs
The cryptocurrency industry seems to be in a state of flux as countries are grappling to forge a regulatory framework to keep a tab on this ever-evolving field of cryptocurrency. Japan is one such nation which is gauging the mood of the industry in dealing with ETFs tracking digital currencies. As per a report by Bloomberg, Japan has given up its plan to allow listed derivatives based on cryptocurrencies, but it may well give the green light to exchange-traded funds (ETFs) that track digital assets.
The report says that the decision to ban instruments like Bitcoin Futures in one of the largest markets for cryptos is like a stumbling block for institutional demand to end the year-long bearish market that has led to a feeling of a growing skepticism among investors. But the possibility of ETFs might help to bring some life and revive the appetite which took a huge battering after Coincheck was hacked and retailers lost money in the range of $50 million and that was followed by the hacking of the Zaif exchange which further dealt a body blow to retailers’ confidence in cryptocurrency.
The Financial Services Agency (FSA) is currently busy assessing the mood of the cryptocurrency industry, but the regulator’s decision against pursuing revisions to the nation’s securities law which would have allowed crypto futures and options to be listed on major financial exchanges has been like a dampener to the spirits of crypto enthusiasts.
The Liberal Democratic Party which is planning to submit a draft by March 2019 of the current session would take into account FSA’s recommendations and it might result is amendments in existing cryptocurrency laws. However, the report adds that the regulatory body has dropped for the time being plans to include approval for trading cryptocurrency derivatives on financial exchanges due to concerns the products would mainly lead to speculation.
Well, Japan is not the only country that is struggling to develop a proper regulatory framework in place. In the U.S., several players are also planning to launch similar products but the SEC has put everything on hold as it is trying to gain an insight into ETFs. SEC has deferred the decision regarding the VanEck/SolidX until February.
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