Key Takeaways:
Wall Street investment firm Franklin Templeton is joining forces with Japanese financial giant SBI Group to form a new exchange-traded fund (ETF) management company in Japan that will be focused on digital assets.
Franklin Templeton And SBI Group Form New Company To Manage Crypto ETFs In Japan
According to a report by Nikkei Asia, which cited sources familiar with the matter, the two companies have officially signed a Memorandum of Understanding (MoU) for the joint venture on July 26.
The partnership comes amidst the potential approval for crypto-focused investment products in Japan.
SBI Group will hold a 51% stake, while Franklin Templeton will own the remaining 49% shares in the joint venture, which will be an asset management firm. The company promises to offer the “new generation of investors” access to crypto-based investment products, potentially introducing fresh new capital into the crypto market and contributing to price appreciation.
The partnership between the Japanese and American financial giants adds more credibility to rumors that Japan’s Financial Services Agency (FSA) may be preparing to approve the first exchange-traded funds backed by cryptocurrencies. However, the regulator has given no timeframe as to when it will be made official.
The newly formed asset management firm is said to offer crypto securities to investors, but no specific details about the company or its products have been disclosed.
Japanese Government’s Pension Fund Is Exploring Options To Invest In Bitcoin
The news follows recent reports that the Government Pension Investment Fund (GPIF) of Japan, which is the world’s largest pension fund holding $1.4 trillion worth of assets under management, is looking to invest in alternative assets such as gold, Bitcoin (BTC), and real estate.
In February, Japan’s cabinet green-lit the inclusion of cryptocurrencies among the assets that local investment limited partnership companies can acquire or hold. The move was part of Prime Minister Fumio Kishida’s “new capitalism” policy, which aims to cultivate the country’s Web3 industry.
Franklin Templeton Will Soon Launch Its Bitcoin And Ethereum ETFs In Japan
When Cointelegraph asked a Franklin Templeton spokesperson about the possibility of launching a crypto ETF in the country, they said it would happen once the regulatory framework permits.
Most importantly, the investment giant pointed out that its joint venture with SBI Group will provide a “diversified range of investment solutions”, including Franklin Templeton’s existing spot Bitcoin and Ethereum ETFs, which are listed in the US.
Franklin Templeton is among the most notable crypto ETF issuers. The asset management giant began trading its spot Ethereum ETF – the Franklin Ethereum ETF (EZET) – in the US on July 25th alongside Ether-backed funds from BlackRock, Grayscale, 21Shares, Bitwise, VanEck, Invesco, and Fidelity.
Most notably, EXET charges the lowest fee among Ether ETF issuers at 0.19%, which is waived until January 31, 2025, or till the fund accumulates the first $10 billion in assets under management (AUM).
The Franklin Bitcoin ETF (EZBC), which is the company’s spot Bitcoin ETF, was officially launched on January 11th and currently has $312 million worth of Bitcoin in AUM.
Franklin Templeton is also considering launching a spot market-traded ETF backed by Solana (SOL). Meanwhile, its chief rivals in the ETF market, VanEck, and 21Shares, have already filed applications with the US Securities and Exchange Commission (SEC) for a spot Solana ETF.
Industry experts speculate that the first batch of spot Solana ETF applications should receive a final decision from the SEC by March 2025.
Franklin Templeton and SBI Group’s jointly-owned asset management firm is poised to introduce financial products that are based on digital assets, and their initiative will be supported by the Japanese government’s evolving framework surrounding cryptocurrencies.
The company is expected to list its Bitcoin, Ether, and possibly Solana-based exchange-traded funds (ETFs) for trade in the Japanese market once the products receive regulatory approval.
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