Japanese Institutional Investors Show Growing Interest in Crypto, With 80% Planning to Invest Within Three Years

In Japan, the perception of crypto investment is transitioning from cautious observation to proactive portfolio management, as revealed by a survey conducted by Nomura and its digital asset subsidiary, Laser Digital. Almost 80% of the country's institutional investors expressed plans to incorporate crypto into their portfolios within the next three years, citing its potential as a diversification tool due to its low correlation with traditional assets. While allocations are expected to be modest, with over half of respondents aiming for a 2% to 5% portfolio allocation, the shift reflects an improvement in sentiment, with 31% of respondents now viewing crypto positively, up from 25% in 2024, and negative sentiment declining to 18%. These findings emerge as Japan continues to refine its regulatory framework for digital assets, having been an early adopter of crypto exchange regulation following the 2014 Mt. Gox collapse. Recent regulatory efforts have focused on integrating digital assets into existing financial laws, contributing to a more favorable environment for the domestic crypto ecosystem, which includes major players such as SBI Holdings and bitFlyer, as well as traditional financial institutions. The survey also indicates a growing interest in income-generating strategies and stablecoins, with 63% of respondents identifying potential use cases for stablecoins, such as treasury management and cross-border payments. However, challenges persist, including the lack of established valuation frameworks, counterparty risks, and regulatory uncertainty, although these concerns are evolving from whether to invest in crypto to how to do so effectively.