Exchange flows remain broadly normal, while stablecoin supply has seen little meaningful contraction. More speculative corners of the digital asset market also continue attracting capital. Products linked to higher-risk crypto assets are still gathering inflows, something Dori says would be unlikely if investors were abandoning the asset class altogether.

Perhaps the strongest argument against the IPO-rotation theory comes from derivatives markets.

Dori pointed to a decline in CME bitcoin futures open interest that has coincided with ETF redemptions. That relationship suggests a significant portion of the outflows may be linked to the unwinding of cash-and-carry arbitrage trades rather than investors reallocating toward equity offerings.

A cash-and-carry trade is a popular institutional arbitrage strategy that seeks to profit from the gap between bitcoin’s spot price and futures prices. Investors buy spot bitcoin, often through an ETF, while also selling bitcoin futures contracts. As long as futures trade at a premium to spot prices, the investor can earn a relatively low-risk yield when the contracts converge at expiry.

When that premium narrows, or funding conditions become less attractive, traders unwind the position by selling their spot exposure and closing their futures shorts. That process can generate ETF outflows even when investors are not turning bearish on bitcoin itself. Instead, the arbitrage opportunity has simply become less profitable.

Japan’s Lower House has moved a bill that would bring crypto assets under the country’s financial instruments framework, signaling a potential shift toward regulated market access such as exchange-traded funds and a more favorable tax posture for digital assets. Bloomberg reported that the legislation aims to regulate crypto assets more like traditional securities, imposing stricter trading rules as part of a broader market growth push. The bill is expected to advance further after consideration by the Upper House and could take effect next year pending final enactment.

The proposed changes would align crypto assets with the regulatory treatment afforded to stocks and bonds, introducing tighter governance and disclosure requirements. At a macro level, the move reflects an ongoing effort to integrate digital assets into Japan’s financial markets while enhancing oversight and investor protections. If enacted, the reform would also reframe the tax landscape for crypto holdings, with potential implications for both retail and institutional participants.

Official records indicate the bill cleared the Committee on Financial Affairs on June 10, though the plenary vote status on the House of Representatives’ tracking page had not yet been updated at the time of reporting. The procedural steps remain subject to confirmation by the Upper House, which would complete the legislative process before implementation.

Japan’s broader regulatory trajectory has been evolving for months, with signals that crypto would move from a payments-oriented regime to a financial-market framework. In November 2025, Asahi Shimbun reported that the Financial Services Agency (FSA) had decided to apply the Financial Instruments and Exchange Act to crypto assets, including Bitcoin, Ether, and other tokens traded on local exchanges. In April 2026, FSA materials stated the proposal would relocate crypto-asset transaction rules from the Payment Services Act to the Financial Instruments and Exchange Act, marking a substantive shift in the regulatory architecture.

The FSA described a framework in which crypto assets would be treated as financial products distinct from traditional securities, while introducing disclosure duties, tighter exchange oversight, insider-trading restrictions, and steeper penalties for unregistered operators. The proposed regime would require crypto-asset transaction businesses to publish information about the assets they handle, and issuers of certain assets would face disclosure obligations during offerings or secondary distributions. Bloomberg again highlighted that such a regime could create a pathway for crypto-tracking ETFs, offering Japanese investors a regulated channel to gain exposure beyond direct exchange trading or holdings in listed companies with token interests.

Key takeaways

• The Lower House appears to have advanced a bill to subject crypto assets to the Financial Instruments and Exchange Act, moving regulation closer to equities and bonds and potentially enabling new market structures such as crypto-tracking ETFs.
• The bill contemplates shifting crypto-asset rules from the Payment Services Act to the Financial Instruments and Exchange Act, with enhanced disclosure, oversight, and penalties designed to bolster investor protection and market integrity.
• Tax provisions would reclassify crypto capital gains with a flat 20% rate—aligned with stocks and bonds—down from a current maximum of 55%. The change is slated to take effect in 2028, subject to final passage and transitional rules.
• Authorities have disclosed that the bill cleared the Committee on Financial Affairs as of June 10, with plenary-vote status pending final confirmation, reflecting a methodical progression through the legislative process.
• The reform could broaden institutional access to regulated crypto exposure via ETFs and other financial-market instruments, potentially integrating digital assets into mainstream investment and risk-management frameworks in Japan.

Regulatory trajectory and scope

The core objective of the bill is to reposition crypto assets within Japan’s financial-market regime, elevating their regulatory status from a payments-focused perimeter to a framework that governs financial products. The proposed move to bring crypto under the Financial Instruments and Exchange Act would harmonize trading rules with those applied to traditional securities, futures, and related instruments. In doing so, the regime would introduce standardized disclosure for asset managers and issuers, as well as stronger oversight of trading venues and intermediaries.

Key features under consideration include classifying crypto assets as financial products distinct from conventional securities, while imposing requirements applicable to market participants, including tighter supervision of exchanges and enhanced penalties for unregistered operators. The scheme would obligate crypto-asset transaction operators to publish information about the assets they handle, a disclosure duty intended to improve transparency for investors and regulators alike. Issuers of certain assets would face disclosure obligations during offerings or secondary distributions, aligning issuance practices with broader financial-market standards.

These measures echo a broader regulatory trend observed in many jurisdictions seeking to reduce information asymmetry and systemic risk associated with digital assets. Notably, the move would align Japan with global policy directions that emphasize market integrity, investor protection, and clear accountability for participants across the crypto value chain. The European Union’s MiCA framework and ongoing U.S. regulatory developments provide a contemporaneous backdrop for such a shift, reinforcing the trend toward formalization of crypto markets within traditional financial infrastructure.

Tax reforms and market access for investors

A central economic dimension of the bill is the proposed tax treatment of crypto gains. The current regime, which can reach up to 55% in capital gains tax, would be replaced by a flat 20% rate on crypto profits, aligning with the tax treatment of stocks and bonds. The timing of the tax reform—policy intent to be effective in 2028—reflects an orderly transition that would grant businesses and individuals time to adjust to the new framework. For institutions, the change could alter after-tax returns and impact portfolio construction, tax planning, and accounting practices tied to digital asset exposures.

From a compliance perspective, the tax realignment sits within a broader policy objective to increase predictability and coherence across asset classes. For crypto firms and asset managers, this could translate into more standardized tax reporting and a clearer line between taxable crypto activities and other financial instruments. For banks and custodians, the reform could influence product design, treasury management, and client advisory services, especially as the market explores regulated wrappers or ETF structures linked to digital assets.

In parallel with tax considerations, the potential for crypto-tracking ETFs marks a significant market-access development. Such products would provide a regulated, exchange-traded vehicle for investors seeking diversified exposure to crypto assets without direct custody of tokens. While the possibility has been flagged by market observers, the actual availability will depend on the final regulatory framework, licensing requirements, and the operational readiness of market participants to meet disclosure, custody, and liquidity standards demanded by Japan’s evolving regime.

Impact on market structure, compliance posture, and policy context

From an institutional perspective, bringing crypto assets into a financial-instrument framework would sharpen compliance expectations across the ecosystem. Exchanges, brokers, asset managers, and issuers would operate under more explicit rules around transaction reporting, asset information disclosure, and governance. The alignment with the Financial Instruments and Exchange Act would also shape AML/KYC programs, recordkeeping, and supervisory oversight, thereby enhancing regulatory certainty for both domestic and cross-border participants.

Beyond Japan’s borders, the reform integrates into a broader international policy discourse on crypto regulation. The MiCA framework in the European Union and U.S. regulatory developments reflect a global shift toward treating digital assets as regulated financial products with explicit consumer protections, capital-raising guidelines, and systemic-risk controls. For multinational firms active in Japan, the legislative trajectory underscores the need to harmonize compliance programs with domestic rules while monitoring developments in other jurisdictions that could influence cross-border operations, licensing equivalencies, and supervisory cooperation.

Another practical consideration concerns the balance between innovation and control. While tighter rules may raise the bar for market participants, they also create clearer paths for institutional involvement—ranging from regulated trading venues to custodian services and product issuances. The forthcoming Upper House deliberations will determine the pace and scope of the reform, including whether the ETF pathway receives formal approval and how disclosure standards will be operationalized across asset classes and offerings.

Closing perspective

Japan’s legislative move to bring crypto assets under a financial-market framework represents a pivotal moment for regulatory clarity, investor protection, and market accessibility. As the process unfolds, watchers should monitor the Upper House deliberations, the final articulation of the tax timetable, and the concrete rules surrounding disclosures and market surveillance. The unfolding framework could influence not only domestic capital markets but also how international entities align their compliance programs and risk controls with Japan’s evolving policy posture.

XRP (XRP) charts are painting multiple bearish patterns this month with a downside target under $1.

Key takeaways:

• XRP is forming head-and-shoulders and bear flag setups on its shorter-time frame chart.
• An on-chain metric is further signaling weak demand or capitulation sentiment among traders.

Head-and-shoulders setup hints at 10% XRP decline

Since June 5, the XRP price has formed what appears to be a head-and-shoulders (H&S) pattern.

The setup develops when the price forms three peaks atop a common neckline support, where the middle peak, called the “head,” is higher than the other two, the “shoulders.”

An H&S pattern typically resolves when the price breaks decisively below the neckline support, with its downside target measured by subtracting the breakdown level from the structure’s maximum height.

XRP/USD four-hour price chart. Source: TradingView

As of Thursday, XRP was forming the pattern’s right shoulder, eyeing an initial dip toward the neckline near $1.09.

Applying the technical rule, the target for June is around $0.99, down roughly 10%, if the price breaks below the neckline.

Conversely, a clear break above the right shoulder’s peak at around $1.12, a level also aligning with the 20-period exponential moving average (20-period EMA, green) on the four-hour chart, may invalidate the H&S pattern.

In that case, XRP may rally toward the 50-period EMA (red) near $1.15, up 4.5% from the current price levels.

Another bearish setup hints at a lower XRP price target

XRP’s four-hour chart also shows a bear flag, adding weight to the sub-$1 bearish outlook.

A bear flag forms when the price consolidates inside a rising channel after a sharp sell-off. It typically signals a pause before the prior downtrend resumes.

XRP/USD four-hour chart. Source: TradingView

As of Thursday, XRP was testing the flag’s lower trendline near $1.10. A decisive four-hour close below this level could confirm the breakdown.

Applying the technical rule, XRP’s bear flag target sits near $0.94, down roughly 15% from current prices.

The relative strength index (RSI) near 43 supports the bearish view, showing weak momentum below the neutral 50 level.

However, a rebound above $1.12 would weaken the setup. A stronger move above the 50-period EMA near $1.15 could delay the selloff and send XRP toward the flag’s upper trend line near $1.18–$1.20.

On-chain data points to dip toward $0.96

XRP’s MVRV pricing bands suggest the price still has room to fall toward the lower green zone.

XRP MVRV extreme deviation pricing bands. Source: Glassnode

For new traders, MVRV compares XRP’s market price with the average price at which coins last moved on-chain. In simple terms, it shows whether holders are sitting on large paper profits or losses.

When price trades near the upper bands, the market is usually overheated. When it falls toward the lower bands, it often signals stress, weak demand, or capitulation.

Related: XRP transaction demand falls 91.5% as traders focus on $0.65 support

That lower green band has acted like a bear-market magnet for XRP in previous cycles. It declined toward or below the same zone during major downturns in 2018, 2020 and 2022 before finding stronger support later.

The next major downside target sits near the green lower band near $0.96, about 13% below current prices if history repeats.

Ripple CEO Brad Garlinghouse has criticized JPMorgan CEO Jamie Dimon’s opposition to the Clarity Act, a bill that would establish rules for much of the U.S. crypto market.

Garlinghouse argued that Dimon mischaracterized the legislation during recent public comments. The disagreement comes as lawmakers continue reviewing the bill before a potential Senate vote.

Garlinghouse disputes Dimon’s criticism of the bill

Speaking during an interview with Fox Business, Garlinghouse responded directly to comments Dimon made about the Clarity Act. The Ripple executive said Dimon incorrectly portrayed the legislation as reducing compliance safeguards. Garlinghouse argued that the bill would provide regulatory clarity rather than weaken oversight.

Garlinghouse said, “What Jamie Dimon did a disservice around is that he’s representing that this reduces compliance concerns.” He added that the characterization was inaccurate and could influence public perception of the legislation. According to Garlinghouse, support for the bill centers on establishing clear rules for digital asset companies.

The comments followed a public debate over provisions contained within the proposed legislation. Lawmakers continue reviewing measures that would define regulatory responsibilities across parts of the crypto industry. The bill remains one of the most closely watched digital asset proposals in Washington.

Stablecoin yield provision remains a key dispute

A major area of disagreement involves language that would allow crypto exchanges to offer stablecoin yield products. Dimon has publicly criticized that provision and questioned efforts supporting its inclusion. Coinbase CEO Brian Armstrong has argued that the measure should remain part of the legislation.

During a previous interview, Dimon said Armstrong was the primary advocate for the provision. He also claimed that Coinbase spent substantial resources supporting policy efforts in Washington. The JPMorgan chief further criticized Armstrong while discussing the stablecoin yield debate.

Garlinghouse acknowledged that Armstrong represents Coinbase rather than the entire crypto sector. However, he said many digital asset firms support legislation that provides regulatory certainty. The Ripple executive argued that industry participants continue seeking clearer operating frameworks in the United States.

Senate vote approaches as lobbying efforts continue

Garlinghouse also linked JPMorgan’s opposition to commercial interests within the banking industry. He said traditional financial institutions benefit from maintaining existing market structures. According to Garlinghouse, those interests influence resistance to parts of the legislation.

The Clarity Act advanced through a Senate committee vote last month. Lawmakers are expected to consider the proposal on the Senate floor before any final action. The measure would establish rules governing large sections of the U.S. digital asset market.

Meanwhile, debate continues among banks, crypto companies, and industry groups over the bill’s final structure. Stablecoin yield provisions remain one of the most contested sections under discussion. Prediction market data from Polymarket currently places the odds of the bill becoming law this year at 47%.

The structure is based on depositary receipts, a longstanding financial product that allows investors to gain exposure to shares through a bank-issued security. Citi has adapted that model for private companies and recorded the securities on blockchain infrastructure operated by Swiss market operator SIX.

The result is a digital version of a traditional financial instrument. Investors own the depositary receipt rather than the underlying shares directly, while Citi acts as both issuer and custodian.

The bank argued the approach could make private-market investing simpler and more transparent than some existing structures, which often rely on special-purpose vehicles and multiple intermediaries.

The launch is part of a larger effort by major financial institutions to tokenize traditional assets.

Tokenization refers to representing real-world assets such as stocks, bonds or bank deposits as digital tokens that can move across blockchain networks.

Supporters say tokenized assets could eventually reduce settlement times, lower costs and allow markets to operate around the clock.

Citi has been among the banks pushing that transition. Earlier this month, Citi joined several of the largest U.S. banks in announcing plans to develop a shared tokenized deposit network through The Clearing House by mid-2027. The system would convert traditional bank deposits into blockchain-based tokens while keeping funds inside the regulated banking system.