Japan’s FSA (Financial Services Agency) is considering lifting the ban on Bitcoin ETFs (exchange-traded funds) and reducing the tax burden on crypto investors.

The proposed changes aim to reclassify crypto assets as financial products akin to securities. Such a paradigm shift would enhance investor protection and boost mainstream adoption.

Japan Considers Tax Reforms and Crypto ETF Approval

Japan’s FSA is holding closed-door study sessions with industry experts to discuss regulatory overhauls and market expansion. Specifically, the agency wants to evaluate whether the current regulatory framework can accommodate the growing crypto market.

“The aim is to protect investors by requiring businesses to disclose more detailed information,” local media reported.

Accordingly, they plan to announce a formal system reform policy by June 2025. Similarly, legal amendments will likely be proposed at the 2026 National People’s Congress session. This initiative follows Japan’s broader effort to integrate digital assets into its financial system while ensuring stricter compliance and transparency.

One of the most anticipated changes is reducing Japan’s steep tax rates on crypto profits, which currently reach up to 55%. The FSA is exploring a more favorable tax regime that could decrease the rate to 20%. Such a move would align with capital gains taxes on other financial instruments like stocks.

Additionally, approving Bitcoin spot ETFs would allow institutional investors to participate in the market more securely. According to Hay Insights, Japan, the country’s financial data hub, has lagged behind other markets, such as the US and Canada, in embracing Bitcoin ETFs.

“These financial instruments [Bitcoin ETFs] have gained traction in markets like the United States and Canada, where regulators have approved spot and futures-based ETFs. However, Japan’s approach remains cautious, reflecting its stringent regulatory environment,” HayInsights wrote.

Analysts believe regulatory clarity and lower taxation will attract more institutional and retail investors despite the challenges. It would strengthen Japan’s position as a global crypto hub if it does happen.

Meanwhile, Japan’s positive stance on cryptocurrencies follows a series of regulatory measures to tighten oversight. Two months ago, the FSA warned KuCoin, Bybit, Bitget, and other exchanges about unregistered operations. As BeInCrypto reported, the regulator highlighted concerns about unlicensed trading platforms operating within the country.

Now, Japan has urged app stores to remove these platforms entirely, signaling a crackdown on unregulated crypto businesses.

Furthermore, the agency conducted a comprehensive review of crypto laws four months ago. BeInCrypto reported that tax cuts were a key focus ahead of Japan’s October elections. The move was perceived as an effort to garner support from pro-crypto lawmakers and investors.

Around the same time, Japanese lawmakers proposed adopting Bitcoin reserves and fostering DOGE policy innovation, following in the footsteps of the US.

Therefore, the potential approval of Bitcoin ETFs and tax reductions would mark a significant milestone for Japan’s crypto industry. If implemented, these measures could position Japan as a leading jurisdiction for digital asset investment. Like in the US, the development would attract domestic and international capital.

However, challenges remain. Regulators must strike a balance between fostering innovation and maintaining financial stability. The FSA’s ongoing consultations with industry experts and stakeholders will be crucial in shaping a regulatory framework that encourages responsible growth.

Crypto markets brace for four important US economic events this week, starting Wednesday, February 12. These macroeconomic events could affect the portfolios of Bitcoin (BTC) holders, making it imperative for investors to adjust their trading strategies.

The influence of US economic events on Bitcoin and crypto generally is progressively resurfacing after a dried-up period in 2023.

CPI

The January CPI (Consumer Price Index) report on Wednesday starts the list of US economic data with crypto implications this week. It comes after December’s CPI rate was slightly increased to 2.9% year-over-year (YoY). Meanwhile, the core rate decreased to 3.2%.

In the latest meeting, the Fed kept its main interest rate steady at 4.25%- 4.50%. They articulated the need for continuous improvement in inflation before considering reducing rates. Forecasts from Cleveland Fed’s Inflation Nowcasting model suggest the main CPI rate will come in at 2.85%, representing a modest drop of 0.5%. They also predict the core rate to have slightly decreased to 3.13%.

Beyond US inflation figures, crypto markets will also be keen to hear remarks from Federal Reserve (Fed) Chair Jerome Powell. His testimony is expected to play a crucial role in deciding the direction of US interest rates. What he says about US President Donald Trump’s tariffs will be of significant interest.

BeInCrypto recently reported that the Fed is already concerned about Trump’s policies, prompting their measured rate-cut strategy.

“Many participants suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters,” the December minutes indicated.

The US CPI data could affect risk-on assets like Bitcoin. High inflation would suggest a hawkish Federal Reserve stance, which could decrease the value of risk-on assets like Bitcoin in the short term. Higher interest rates can make traditional investments more attractive.

On the other hand, if CPI data shows lower-than-expected inflation, it may indicate a more dovish stance from the Fed. This would be positive for Bitcoin. Lower inflation rates could increase demand for Bitcoin as investors seek alternative investments to protect their wealth.

Initial Jobless Claims

On Thursday, the US Department of Labor (DoL) will release its weekly jobless claims report, which will shed light on the health of the US labor market. This US economic data indicates the number of people who filed for unemployment insurance last week, providing a snapshot of the labor market’s performance.

The previous initial jobless claims data came in at 219,000 for the week ending February 1. Lower-than-expected claims suggest continued job market strength, potentially signaling steady consumer spending and a resilient economy.

However, such strength might prompt the Fed to consider raising interest rates, which could boost the USD but weigh on Bitcoin.

PPI

Also, on Thursday, the US PPI (Producer Price Index) data will be out, offering insight into inflation at the producer level. It also provides early signals about future consumer prices and can influence investor sentiment.

The US Bureau of Labor Statistics (BLS) report could have crypto implications. This week’s US PPI report will disclose January’s producer-level inflation, with a median forecast of 0.3%. December’s data came in at 0.2% PPI, indicating that inflationary pressures were easing.

A higher-than-expected US PPI reading may indicate increasing production costs, leading to higher consumer prices. Investors may turn to assets like Bitcoin as a hedge against inflation, driving up demand and prices.

Positive or negative surprises in the US PPI data can also influence market sentiment and risk appetite. If the PPI shows rising inflation, investors may seek alternative assets like Bitcoin as a store of value or haven asset.

Conversely, lower-than-expected PPI figures could lead to risk-on sentiment in traditional markets, potentially influencing demand for cryptocurrencies.

Another perspective is the correlation between crypto and traditional markets. If rising PPI leads to a sell-off in equities, some investors may reallocate their capital to Bitcoin and other digital assets.

“CPI and PPI are coming in, but also a strong week for Crypto seems to be on the horizon. This week is comparable to any previous crisis period. During crisis periods, you’d want to be bullish, and max pain is upwards, not down,” crypto analyst Michaël van de Poppe urged.

Retail Sales

US retail sales data provides valuable insights into consumer spending patterns, economic growth, and overall market sentiment. If Friday’s US economic data is better than expected, it would indicate strong consumer spending and confidence in the economy.

This positive economic outlook could spill over into the cryptocurrency market, as investors may interpret it as a sign of overall market strength and stability.

Higher consumer spending could lead to increased disposable income, which some individuals may allocate to cryptocurrencies like Bitcoin.

According to data from BeInCrypto, BTC was trading for $97,040 as of this writing, down by 0.01% since Monday’s session opened.

The University of Austin is making major moves in institutional Bitcoin adoption, planning to launch a dedicated Bitcoin investment fund.

This initiative reflects the increasing interest among US institutions to adopt Bitcoin and other digital assets.

University Endowment Funds Increasingly Embrace Crypto

Latest reports reveal that the University of Austin, established just a year ago, is raising a $5 million Bitcoin fund as part of its $200 million endowment. This move positions it as the first institution in the US to introduce a dedicated crypto endowment fund.

Chad Thevenot, the university’s senior vice president for advancement, stated that the Bitcoin holdings will remain untouched for at least five years. He likened Bitcoin’s long-term value to traditional investment assets such as real estate and equities.

“We think there is long-term value there, just the same way that we might think there is long-term value in stocks or real estate,” Thevenot explained.

While this marks a significant step in institutional crypto adoption, Austin is not alone. Last year, Emory University invested over $15 million in Bitcoin through Grayscale’s spot Bitcoin exchange-traded fund (ETF). It was the first endowment to gain direct exposure to the leading cryptocurrency.

Historically, endowments have maintained a conservative stance on cryptocurrencies, largely avoiding them. However, shifting regulatory landscapes and increasing acceptance of digital assets are encouraging a change in strategy.

Why Are Endowment Funds Turning to Bitcoin?

The growing pro-crypto stance of the US government has played a role in accelerating institutional interest. A recent executive order focused on strengthening leadership in digital finance is paving the way for broader blockchain adoption. This initiative promotes responsible growth in the digital asset sector.

A key part of this policy is the President’s Working Group on Digital Asset Markets, led by newly appointed crypto and AI czar David Sacks. The group is tasked with developing a regulatory framework for digital assets, including stablecoins, while also exploring the creation of a national digital asset reserve.

As a result, endowment funds are trooping into the emerging sector. For context, the Rockefeller Foundation, managing $4.8 billion in assets, has hinted at increasing its exposure to cryptocurrencies.

The foundation has previously invested in crypto-focused venture funds but is now considering deeper involvement, especially as broader market adoption gains momentum.

Chun Lai, the foundation’s chief investment officer, acknowledged the uncertainties surrounding Bitcoin’s long-term trajectory. However, he emphasized the risk of missing out on substantial opportunities if the foundation does not take action.

“We don’t have a crystal ball on how cryptocurrencies will become in 10 years. We don’t want to be left behind when their potential materialises dramatically,” Lai said.

Market observers noted that the increasing integration of Bitcoin into institutional portfolios highlights its growing appeal as an alternative asset.

So, as regulatory frameworks become clearer, more institutional investors will recognize digital assets as viable components for their traditional financial portfolios, which would further cement Bitcoin’s role in mainstream finance.