More than half of Japanese institutional investors are planning to allocate funds to cryptocurrencies in the next three years, according to a survey conducted by Nomura Holdings and its crypto subsidiary, laser Digital. The survey, which involved over 500 investment managers in Japan, found that 54% of respondents intend to invest in crypto assets. The majority of those surveyed expressed interest in digital assets to some extent in the future. Factors driving this interest include the introduction of crypto products like exchange-traded funds (ETFs), investment trusts, staking, and lending. However, some institutions cited concerns such as counterparty risks, high volatility, and regulatory requirements as barriers to investing in cryptocurrencies. The survey also revealed that 25% of respondents have a positive impression of cryptocurrencies, while 62% see them as an opportunity for investment diversification. The preferred allocation for crypto assets among investors is 2-5% of assets under management (AUM). Additionally, respondents showed interest in investing in Web3 projects, either directly or through venture capital (VC) funds. Japan’s government has been working on an economic reform bill that could have significant implications for the crypto industry, including the inclusion of digital assets in the legal framework. This move would legitimize their use in institutional investments and position Japan as a crypto-friendly jurisdiction globally. Japan has also been at the forefront of compliant crypto payments and has shown interest in adding Bitcoin to its $1.5 trillion pension fund. Furthermore, the country has implemented strict regulations for stablecoins, allowing only banks, money transmission services, and trust firms to issue stablecoins and requiring that their reserves be held in Japanese trust and invested solely in domestic bank accounts.
