Japan Moves Toward Crypto ETFs as U.S. Lawmakers Tighten Conflict Rules

Japan’s financial regulator is moving closer to allowing crypto asset exchange-traded funds, while U.S. lawmakers tighten conflict-of-interest rules on digital assets—two developments that could reshape both 'institutional demand' and regulatory guardrails across major markets.

According to a report cited by PANews from Nikkei, Japan’s Financial Services Agency (FSA) plans to revise regulations tied to the Investment Trust Act by 2028, enabling crypto assets to become eligible as primary holdings for investment trusts and ETFs. The shift would bring Japan—a key hub for retail trading and increasingly active institutional allocators—more in line with jurisdictions that have already begun integrating spot crypto products into mainstream portfolios.

Multiple asset managers are said to be exploring product launches in anticipation of the change. A survey by Nomura Holdings indicated that roughly 79% of institutional investors and family offices plan to invest in crypto assets within the next three years, underscoring the growing pressure on regulators to modernize frameworks that govern custody, disclosures, and fund structures.

Market research firm XWIN projected that if Japan rolls out crypto ETFs, inflows could reach as much as 3 trillion yen—about $20 billion—driven largely by retail capital. While forecasts vary widely, analysts generally view ETF availability as a powerful distribution channel that can turn sporadic retail interest into steadier, programmatic flows—especially when packaged within familiar brokerage and retirement-style wrappers.

In the U.S., the regulatory narrative remains centered on how to set clarity without enabling conflicts. The U.S. Senate’s pending digital-asset market structure proposal—widely referred to as the CLARITY Act—was updated Wednesday ET by Republican senators to include a provision that would bar federal officials, including the president, from issuing or promoting cryptocurrencies. The updated text would restrict officeholders from benefiting financially through digital assets, though details on enforcement and scope were not immediately disclosed.

Separately, crypto journalist Eleanor Terrett said the Blockchain Regulatory Certainty Act (BRCA) maintains the same core structure as the version that passed the Senate Banking Committee in May. The bill would clarify that 'non-custodial' software developers and blockchain infrastructure providers are not treated as money transmitters solely for building or maintaining decentralized networks. The Lummis–Grassley amendment remains, preserving federal criminal liability for actors who knowingly facilitate illicit transactions.

The BRCA also retains language often described as the “keep your coins” provision, reinforcing users’ rights to 'self-custody.' On stablecoins, it would bar companies from paying interest on idle stablecoin balances, while allowing certain activity-linked rewards—such as trading or staking incentives—if they are not economically and functionally equivalent to bank deposit interest. Additional sections would support state and local digital-asset investigations, expand training for law enforcement and prosecutors, establish a cyber center addressing threats from state actors such as North Korea and Iran, and strengthen customer asset protections in the event of an exchange or custodian bankruptcy—aiming to avoid a repeat of FTX-style outcomes.

Beyond regulation, major financial institutions and consumer-tech firms are also advancing blockchain-based payment rails. Bank of New York Mellon ($BK), according to Bloomberg via PANews, told clients it is working toward launching tokenized U.S. Treasuries by the end of 2026 and plans pilot transactions on its own private blockchain. The bank’s longer-term goal is to support 24/7 settlement for both traditional and tokenized Treasuries in 2027, reflecting a broader industry push to bring always-on settlement to legacy markets.

Earlier this year, BNY Mellon facilitated after-hours Treasury trading involving stablecoin issuers, with participants reportedly including Ripple’s RLUSD and OpenEden’s USDO—both backed by short-term U.S. Treasuries. The experiments highlight how tokenized collateral and stablecoins are increasingly viewed as complementary infrastructure for around-the-clock liquidity and settlement.

Security risks, however, continue to shadow DeFi activity. Odaily reported that Arbitrum ecosystem protocol AFX suffered an exploit around Wednesday 9:30 p.m. ET, with approximately 24.15 million USDC stolen. Security firm Blockaid said it is coordinating incident response with the Arbitrum team and supporting efforts to freeze funds by working with the affected protocol. Offchain Labs co-founder Steven Goldfeder said the incident occurred on a third-party protocol and that Arbitrum’s native bridge was not attacked.

In consumer payments, Samsung Electronics ($005930.KS) unveiled plans at its Galaxy Unpacked 2026 event to introduce stablecoin support in Samsung Wallet, according to DigitalToday. Samsung described an effort to integrate payments, rewards, and digital assets into a single wallet experience. The company also introduced “Samsung Galaxy Card,” a Samsung Wallet-based financial service launching in the U.S. in collaboration with Barclays and Visa, while emphasizing end-to-end encryption through its Knox security platform.

In Korean market updates, Upbit said it will list o1.exchange (O) on KRW, BTC, and USDT markets, with trading scheduled to begin Thursday 6:00 a.m. ET. Deposits and withdrawals are expected to open within two hours of the notice, with support limited to the Base network.

On the corporate treasury front, Watcher.Guru reported that Tesla ($TSLA) did not sell its Bitcoin (BTC) holdings—valued at roughly $825 million—during Q2 2026. Corporate decisions to hold or reduce BTC positions are closely watched as sentiment signals, particularly during periods when spot demand is dominated by ETFs, long-term holders, or macro-driven flows.

Coinbase ($COIN) said it now supports sending and receiving USDC.e and USDT0 on the Tempo network through its website and mobile apps in supported regions. Meanwhile, Whale Alert flagged a transfer of 953 BTC—worth about $63.2 million—from an anonymous wallet to Coinbase, a type of movement traders often monitor for potential sell pressure, though the funds’ ultimate intent remains unconfirmed.

Together, the day’s developments reflect a market being pulled in two directions: accelerating product access—from Japan’s ETF roadmap to tokenized Treasuries and stablecoin-enabled consumer wallets—while policymakers and security teams attempt to tighten rules and defenses around what is increasingly treated as critical financial infrastructure.