Japan should create a legal framework for trading cryptocurrency exchange-traded funds (ETFs), the ruling Liberal Democratic Party (LDP) said, according to a Reuters report on Monday.
A party panel on promoting blockchain technology submitted the proposal to Finance Minister Satsuki Katayama, also saying the state should promote usage of yen-based stablecoins.
“Crypto-ETFs would provide investors with easy-to-understand ways of investment,” the proposal said, according to Reuters’ report.
The country’s cabinet approved a draft amendment to classify crypto as a financial product in April, having previously treated it as a payment tool.
Japan would be joining other major markets such as the U.S. and Hong Kong in offering ETFs as a means to gain exposure to the crypto market without having to buy and store the underlying assets themselves.
Attempts are already underway to develop and promote yen-based stablecoins, which are digital tokens pegged to the value of a traditional financial asset, such as a fiat currency.
The $315 billion market is dominated by tokens pegged to the dollar, prompting concerns by policymakers in countries outside the U.S. that dollar dominance could circumvent their own banking and payments systems.