Japan Explores Crypto ETFs after Snubbing Bitcoin Futures

Cryptocurrencies have had a rough 2018. A yearlong sellout has been crushing for a large portion of the investors who were hoping for prices to recover after the January 2018 plunge. Moreover, cryptocurrencies’ continued association with stories of fraud and money laundering related crimes have not helped in improving their image.

This caused authorities across the world to clamp down on the digital assets market and block, ban or bar most of them from trading until better oversight and supervision was possible. In the latest such news, Japan’s financial watchdog, the Financial Services Agency has decided not to allow listed derivatives based on cryptocurrencies.

The biggest digital heist in history, the Coincheck heist, originated in Japan when someone hacked into the digital wallet of Japanese cryptocurrency exchange Coincheck Inc and managed to steal $500 million in digital tokens. As a result, cryptocurrencies attracted extreme criticism for their lack of oversight.

Japan’s current policies towards cryptocurrencies are believed to have been affected by the events of the Coincheck Heist. Japan’s market is one of the biggest markets for cryptocurrencies. For derivatives like Bitcoin futures and Ethereum options to be banned in such a large market is just another setback for crypto enthusiasts after an already rough year.

As reported by Bloomberg, while the plan to allow listed derivatives based on cryptocurrencies has been dropped, exchange-traded funds that track the asset class might still be approved. Bloomberg also reported that the financial watchdog is currently measuring up the industry’s interest in ETFs that track digital currencies.

Last month, the FSA decided against considering revisions to Japan’s securities law which would have changed the country’s stance against cryptofutures and options. The decision was announced after an investigation into the agency’s failure to stop the Coincheck heist.

Moreover, the agency has also decided to give more oversight powers to self-regulatory bodies and put ICOs under heightened scrutiny under the country’s securities law. This policy by the FSA follows suit of many other countries’ policies against cryptocurrencies. Cryptocurrencies are very powerful and have the ability to remove the need for middleman institutions that take a piece of the pie for their troubles.

However, before they are able to do that, digital assets need to be decoupled from the controversial and in some cases criminal incidents that are carried out on their platform. The best way to do that is through sensible regulations and oversight by the authorities that can protect the ordinary investors and hold the crypto companies accountable for their actions.