Global Expansion of Crypto ETFs by 2026: Progress in Asian Markets
As of July 2026, the development of cryptocurrency ETFs in Asia presents a "polarized" landscape: Hong Kong has launched operations but is experiencing persistent shrinkage in scale; Japan has passed legislation to open the door for ETFs, but official listings will not occur until 2028; South Korea has pledged approval but without a specific timeline; and Singapore has explicitly rejected retail spot ETFs.
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Hong Kong: Launched, but Scale Shrinking Significantly
Hong Kong was the first region in Asia to launch spot cryptocurrency ETFs. In April 2024, three asset management firms (Bosera, China Asset Management, and Harvest) introduced Asia's first batch of spot Bitcoin and Ethereum ETFs, supporting trading in Hong Kong dollars, US dollars, and renminbi.
However, real data in 2026 is not optimistic:
As of February 28, 2026, the management scales of the three Bitcoin spot ETFs were:
Bosera HashKey Bitcoin ETF:USD 77.81 million(down approximately 50% from USD 156 million in October 2025)
Harvest Bitcoin Spot ETF:USD 14.85 million(down over 50% from USD 31.97 million in October 2025)
Pando Bitcoin ETF:USD 27.11 million(slightly down from USD 35.1 million in October 2025)
Combined total: approximatelyUSD 120 million, far from comparable to the hundreds of billions of dollars in Bitcoin ETFs in the US market.
Japan: Legislation Passed, ETFs Coming in 2028
On June 11, 2026, Japan's House of Representatives passed amendments to the Financial Instruments and Exchange Act, reclassifying cryptocurrencies as "financial instruments" and placing them under the same regulatory framework as stocks and bonds.
Direct Impact:This paves the legal path for the listing of cryptocurrency ETFs. SBI Holdings has already proposed Bitcoin and XRP ETF plans, aiming to achieve approximatelyJPY 5 trillion (about USD 32 billion)in assets under management within three years of listing.
But two key timelines need attention:
January 1, 2028: The new 20% tax rate on crypto assets takes effect. Currently, cryptocurrency gains are classified as "miscellaneous income," with a maximum tax rate of 55%. Only after the reduction to a unified 20% capital gains tax will the institutional barriers for retail investors be truly cleared.
Before that (starting April 2026): Japanese companies are exempt from paying taxes on unrealized crypto asset gains, aimed at curbing the outflow of Web3 enterprises.
Therefore, although legal obstacles for Japanese ETFs have been largely removed, listings on domestic exchanges are expected to occur only in2028.
Potential Fund Volume:According to CryptoQuant analysts, under an optimistic scenario, Japanese Bitcoin ETFs could attract nearlyUSD 20 billionin inflows in the first year. If realized, this would become the second institutionalized capital gateway after the United States.
South Korea: Pledged, but Timeline Vague
In January 2026, the South Korean government formally confirmed in its "2026 Economic Growth Strategy" that it plans to approve spot Bitcoin ETFs and other digital asset ETFs.
Driving Factors:The successful operation of spot ETFs in the US (2024) and Hong Kong (2024) serves as the primary reference. The South Korean government also estimates that approximatelyUSD 110 billionflowed to offshore crypto platforms in 2025, and it hopes to retain these funds domestically through local compliant products.
Obstacles:The current Capital Markets Act does not recognize cryptocurrencies as eligible underlying assets for ETFs, requiring legislative amendments. Regulators are reviewing prerequisites such as custody standards, pricing mechanisms, and investor protection.
Timeline:Initially planned for late 2025, the launch was postponed to 2026 due to stablecoin governance and investor protection issues. As of July 2026,no clear approval or listing timelinehas been established.
Singapore: Explicitly Rejects Retail Spot ETFs
The Monetary Authority of Singapore (MAS) has clearly stated that it will not allow Bitcoin spot ETFs to be listed for retail investors in Singapore.
Official Rationale:Under Singaporean law, cryptocurrencies like Bitcoin are not considered eligible assets for retail collective investment schemes (CIS). MAS states that "cryptocurrency trading is highly volatile and speculative in nature, making it unsuitable for retail investors."
But Not Entirely Inaccessible:Retail investors can still invest in overseas-listed Bitcoin spot ETFs through Singapore-licensed capital market intermediaries—provided these institutions offer adequate risk disclosures and assess customer suitability.
Institutional Path:Singapore continues to support the establishment of crypto funds through the VCC (Variable Capital Company) structure, targeting accredited investors and institutions, and can benefit from 13O/13U tax incentives.
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Emerging Trend: Tokenized ETFs (South Korea)
Beyond traditional ETFs, South Korea's largest asset manager,Mirae Asset, announced in June 2026 a partnership with Ondo Finance to tokenize itsUSD 99 billionGlobal X ETF product line on-chain.
The first product is planned for launch in the third quarter of 2026 in Hong Kong, covering themes such as AI, blockchain, and space innovation. This marks the first time a major Asian asset manager has put ETFs on-chain, signifying a substantive integration of traditional asset management and crypto infrastructure.
How long will it take for capital to return after Japan's ETF tax reform?
The institutional gate is truly opened only after the new tax system takes effect in January 2028. Institutional funds typically observe the compliance window after tax implementation rather than entering immediately upon legislative passage.
If South Korean ETFs are approved, how much incremental capital could they bring?
South Korea saw approximately USD 110 billion flow to overseas crypto platforms in 2025. If local ETFs can absorb 10%-20% of this capital back in the first year after approval, that would represent a scale of tens of billions of dollars. However, this depends on smooth legislative progress and adequate infrastructure for custody, pricing, etc.
What does the shrinking scale of Hong Kong ETFs reflect?
It reflects that "first-mover advantage" does not equal "sustained competitiveness." Hong Kong ETFs attracted initial attention upon launch, but subsequent capital has flowed to the deeper US market. Factors such as pricing mechanisms, liquidity, and tax costs all affect the competitiveness of Hong Kong ETFs—this is not about whether products exist on exchanges, but about market depth.
