(Updated 31 Jul with responses from JPX Market Innovation & Research.)
Updated: Japan Exchange Group's data arm and the Nikkei group's financial-information company began jointly operating an official yen-denominated crypto price benchmark, lending a national exchange operator's name to a public gauge of spot prices.
Regulated products such as exchange-traded funds (ETFs) need an official, hard-to-game price to settle against. That is the role an exchange-run benchmark is built to play, and until now Japan had no such gauge carrying a national exchange operator's name.
On 29 Jul, JPX Market Innovation & Research, the data subsidiary of Japan Exchange Group (JPX), and QUICK, the Nikkei group's financial-information arm, started jointly calculating the JPX-QUICK Crypto Asset Index Series, per the companies' joint release.
QUICK's existing Bitcoin (BTC) index was renamed the JPX-QUICK Bitcoin Index, and a new JPX-QUICK Ethereum Index, tracking Ether (ETH), began beside it. Each coin has a standard and a real-time measure.
An index is a single reference number meant to stand for a market's price at a moment, not any one trade on any one venue. The two indices were set to take deliberately different approaches. The standard measures, built as a stable reference, take a volume-weighted average of the trailing 60 minutes and recalculate every five minutes; the real-time measures, made to track the market live, average the trailing 15 seconds every 15 seconds. Because it weights each trade by size and averages a full hour, one distorted trade barely moves the standard index, whereas a raw spot price has no such buffer. That makes it harder to game, and more trustworthy as the settlement reference for a product.
JPX Market Innovation & Research says the standard index also excludes certain trades outright under its published methodology.
The series draws execution data from four reference exchanges, the venues the operators deem suitable: bitFlyer, Coincheck, GMO Coin and bitbank, a panel set to run both indices for an initial period set out in the operators' benchmark-exchange list.
With more than 14mn crypto exchange accounts opened and about ¥5tn (roughly $30–33bn) in user deposits as of last year in Japan, per the Financial Services Agency (FSA) data cited in the release, JPX and QUICK framed crypto as increasingly treated as an investment product in Japan.
On 15 Jul, Japan's National Diet, the country's parliament, gave final approval to amendments moving crypto out of the Payment Services Act and into the Financial Instruments and Exchange Act (FIEA), the statute governing stocks and bonds. That treats crypto as an investment product and is a precondition for regulated vehicles such as ETFs.
In the US, spot Bitcoin and Ether ETFs list on exchanges including Nasdaq, the New York Stock Exchange (NYSE) and Cboe, yet many settle against a separate benchmark, the CME CF reference rates, administered by the index provider CF Benchmarks in partnership with CME Group, operator of the Chicago Mercantile Exchange.
Japan's arrangement is different: JPX operates the Tokyo exchange where a crypto ETF would list and now co-runs an official price benchmark of the kind such a fund needs to settle against. In a Bloomberg TV interview in late April, before the law passed, JPX Group CEO Hiromi Yamaji said the exchange expected to begin forming some kind of crypto product the following year, as the revised law moved through the Diet.
Asked by Sandmark after publication, JPX Market Innovation & Research confirmed the series is designed for use as an underlying benchmark for regulated products such as ETFs, and said the new Ethereum index was created with the same aim. It does not publish detailed criteria for the four reference exchanges, saying they were selected on factors such as trading volume, and said the panel could widen if an exchange asked to join and met its checks.
