SBI Holdings Files for Japan’s First Combined Bitcoin and XRP ETF in Groundbreaking Move
Tokyo, Japan, March 2025: In a significant development for Asian cryptocurrency markets, SBI Holdings has formally submitted an application to Japan’s Financial Services Agency (FSA) for a groundbreaking exchange-traded fund that would track both Bitcoin and XRP. This pioneering move represents the first attempt to launch a multi-cryptocurrency ETF in Japan, potentially opening new institutional investment pathways in one of the world’s most regulated digital asset environments.
SBI Holdings Files for Combined Bitcoin and XRP ETF
SBI Holdings, one of Japan’s largest financial services groups, confirmed the filing through official channels on Wednesday. The application seeks regulatory approval for an ETF that would provide investors with exposure to both Bitcoin and XRP within a single, regulated financial product. According to documents reviewed by financial journalists, the proposed ETF would track a custom index comprising both cryptocurrencies, with specific weightings to be determined upon approval.
The filing comes after months of preparation and follows SBI’s established presence in digital asset markets. The company operates SBI VC Trade, one of Japan’s licensed cryptocurrency exchanges, and has maintained strategic partnerships with Ripple Labs, the company behind XRP, since 2016. This existing relationship provides SBI with unique institutional knowledge about XRP’s technology and market behavior.
Japan’s Financial Services Agency now enters a review period that typically lasts several months. Regulators will examine the proposal’s structure, custody arrangements, market manipulation safeguards, and investor protection mechanisms. The FSA has historically taken a cautious approach to cryptocurrency products, implementing strict standards following the 2014 Mt. Gox collapse and subsequent exchange hacks.
Regulatory Landscape for Cryptocurrency ETFs in Japan
Japan’s regulatory framework for digital assets has evolved significantly since the country officially recognized cryptocurrencies as legal property in 2017. The Payment Services Act (PSA) and Financial Instruments and Exchange Act (FIEA) provide the foundation for cryptocurrency regulation, with the FSA serving as the primary oversight body.
Key regulatory considerations for the proposed ETF include:
- Custody Requirements: Japanese regulations mandate strict custody standards for cryptocurrency holdings, requiring cold storage solutions and regular audits
- Market Surveillance: The ETF would need robust systems to detect and prevent market manipulation, given cryptocurrency’s volatility
- Investor Protection: Clear risk disclosures and suitability assessments would be required for retail investors
- Anti-Money Laundering: Compliance with Japan’s stringent AML regulations, including know-your-customer (KYC) procedures
The table below illustrates Japan’s regulatory progression toward cryptocurrency investment products:
| Year | Regulatory Development | Impact |
|---|---|---|
| 2017 | Cryptocurrency recognized as legal property | Established legal foundation for digital assets |
| 2020 | Revised Payment Services Act implemented | Enhanced investor protections and exchange regulations |
| 2023 | FSA begins reviewing cryptocurrency ETF concepts | Opened dialogue about regulated investment vehicles |
| 2024 | First cryptocurrency derivatives products approved | Created precedent for regulated crypto exposure |
Historical Context of Cryptocurrency in Japan
Japan’s relationship with cryptocurrency has been both pioneering and cautious. The country was among the first to establish comprehensive cryptocurrency regulations following the 2014 collapse of Mt. Gox, then the world’s largest Bitcoin exchange. This event prompted the Japanese government to develop robust consumer protection measures while still fostering innovation in financial technology.
SBI Holdings has been at the forefront of Japan’s cryptocurrency institutionalization. The company launched its cryptocurrency exchange in 2018 and has gradually expanded its digital asset offerings. In 2020, SBI established a joint venture with Switzerland’s SIX Digital Exchange to develop digital asset infrastructure, demonstrating its commitment to building institutional-grade cryptocurrency solutions.
The selection of XRP alongside Bitcoin reflects strategic considerations. XRP has maintained regulatory clarity in Japan, where the FSA has not classified it as a security—unlike ongoing debates in the United States. This regulatory certainty, combined with SBI’s existing Ripple partnership, makes XRP a logical choice for Japan’s first multi-crypto ETF.
Potential Market Impact and Investor Implications
If approved, the SBI Bitcoin and XRP ETF would represent a watershed moment for Japanese investors. Currently, Japanese retail investors access cryptocurrencies primarily through licensed exchanges, while institutional investors face limited regulated options. The ETF structure would provide several advantages:
- Regulated Access: Investors gain exposure through a traditional, regulated financial product
- Simplified Taxation: ETF holdings may simplify tax reporting compared to direct cryptocurrency ownership
- Professional Management: The ETF would handle custody, security, and rebalancing
- Diversification: Single product exposure to two major cryptocurrencies with different use cases
Market analysts suggest the ETF could attract significant institutional capital. Japanese pension funds and insurance companies, which manage trillions of yen in assets, have shown increasing interest in cryptocurrency as a diversification tool but have been constrained by regulatory and custody concerns. A regulated ETF would address many of these barriers.
The international implications are equally significant. Japan would join the United States, Canada, and several European countries in offering cryptocurrency ETFs, but with the distinctive feature of combining multiple digital assets. This could influence regulatory approaches in other Asian markets, particularly South Korea and Singapore, which are also developing cryptocurrency investment frameworks.
Technical Structure and Operational Considerations
While SBI Holdings has not released detailed technical specifications, industry experts anticipate the ETF would employ a physically-backed structure. This means the fund would hold actual Bitcoin and XRP in secure custody rather than using derivatives or synthetic replication. Physical backing provides direct exposure to price movements and eliminates counterparty risk associated with derivatives.
The custody solution will likely involve multiple layers of security. Japanese regulations require licensed cryptocurrency exchanges to store the majority of customer assets in cold wallets—offline storage disconnected from the internet. The ETF would need to implement similar or enhanced standards, potentially using multi-signature wallets and geographically distributed key storage.
Pricing and liquidity present additional challenges. Unlike traditional ETFs that price based on exchange closing prices, cryptocurrencies trade 24/7 across global markets. The fund would need to establish clear pricing mechanisms, likely using volume-weighted average prices from multiple licensed exchanges during specific observation periods.
Comparative Analysis with Global Cryptocurrency ETFs
The proposed SBI ETF differs significantly from existing cryptocurrency investment products worldwide. Most approved cryptocurrency ETFs track single assets, primarily Bitcoin. The combined Bitcoin and XRP approach creates unique diversification characteristics and regulatory considerations.
Key differences from other markets include:
- United States: SEC-approved Bitcoin ETFs are single-asset, physically-backed products with strict surveillance-sharing agreements
- Canada: Offers both Bitcoin and Ethereum ETFs but as separate products rather than combined funds
- Europe: Several multi-crypto ETPs exist but typically as exchange-traded notes rather than physically-backed ETFs
- Australia: Recently approved cryptocurrency ETFs but with limitations on direct cryptocurrency holding
Japan’s approach appears to balance innovation with caution. By combining two established cryptocurrencies with different technological foundations and use cases, the ETF offers diversification while limiting complexity. Bitcoin serves primarily as a store of value and inflation hedge, while XRP facilitates cross-border payments and settlement. This combination may appeal to investors seeking both capital appreciation and exposure to blockchain utility.
Timeline and Approval Process Expectations
The FSA’s review process typically involves multiple stages of examination and consultation. Industry observers suggest a decision could come within six to nine months, though complex products sometimes require longer evaluation. The timeline depends on several factors:
- Completeness of Application: Whether SBI has addressed all potential regulatory concerns in its initial submission
- Market Conditions: Cryptocurrency price stability and trading volume during the review period
- International Developments: Regulatory actions in other jurisdictions that might influence Japanese authorities
- Political Climate: Government priorities regarding financial innovation and investor protection
If approved, the ETF would likely launch on the Tokyo Stock Exchange, Japan’s premier trading venue. Listing requirements would include minimum market capitalization, liquidity provisions, and continuous disclosure obligations. SBI would need to appoint market makers to ensure adequate trading liquidity, particularly important for a novel financial product.
Conclusion
SBI Holdings’ application for Japan’s first combined Bitcoin and XRP ETF represents a significant milestone in cryptocurrency institutionalization. The move demonstrates growing maturity in digital asset markets and reflects Japan’s balanced approach to financial innovation and investor protection. If approved, the ETF would provide Japanese investors with regulated access to cryptocurrency diversification through a familiar investment vehicle while potentially influencing regulatory approaches across Asia. The Financial Services Agency’s decision will signal Japan’s position in the global evolution of cryptocurrency investment products and could accelerate institutional adoption throughout the region.
FAQs
Q1: What is SBI Holdings applying for with Japan’s Financial Services Agency?
SBI Holdings has filed an application for an exchange-traded fund (ETF) that would track both Bitcoin and XRP prices. This would be Japan’s first ETF combining multiple cryptocurrencies in a single regulated investment product.
Q2: Why is this ETF application significant for Japan’s cryptocurrency market?
The application represents a potential breakthrough for institutional cryptocurrency investment in Japan. It would provide regulated access to digital assets through traditional financial structures, potentially attracting pension funds, insurance companies, and other institutional investors who have been cautious about direct cryptocurrency exposure.
Q3: How does Japan’s regulatory approach to cryptocurrency ETFs compare to other countries?
Japan has taken a more cautious approach than some jurisdictions, implementing strict investor protections following earlier exchange failures. The country’s regulations emphasize custody security, market surveillance, and clear risk disclosures. The combined Bitcoin and XRP approach is unique among major markets.
Q4: What are the main regulatory hurdles for the proposed ETF?
Key regulatory considerations include secure custody solutions that meet Japan’s cold storage requirements, robust market manipulation prevention systems, clear investor risk disclosures, and compliance with anti-money laundering regulations. The FSA will also examine the fund’s pricing mechanisms and liquidity provisions.
Q5: When might investors expect a decision on the SBI Bitcoin and XRP ETF?
While timelines vary, similar financial product applications in Japan typically undergo six to nine months of regulatory review. The decision depends on the completeness of SBI’s application, market conditions during review, and developments in international cryptocurrency regulation that might influence Japanese authorities.
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