Why JPX’s Crypto Exclusion Rule for TOPIX Needs a Second Look Before 2026

JPX Market Innovation & Research (JPXI) is considering a new rule that would defer companies whose principal asset is cryptoassets from inclusion in TOPIX and other periodically reviewed indices. The proposal, currently under consultation, aims to address how to treat a newly emerging category of issuers within a rules-based benchmark. However, the specific rule raises significant concerns.

The proposal would impact companies such as Metaplanet, Remixpoint, and ANAP Holdings, along with a growing number of Japanese issuers whose business models are fully regulated and aligned with corporate treasury practices. Here are seven reasons JPXI should reconsider the proposal before February 2026.

1. The Rule Introduces a New Kind of Judgment to TOPIX’s Objective Methodology

TOPIX is designed as a broad, neutral, and investable benchmark for the Japanese equity market. Its methodology relies on objective criteria such as liquidity screens, free-float-adjusted market capitalization, continuation buffers, and established treatments for delistings and listing-quality events. A crypto-asset screen, however, measures something entirely different—it evaluates the composition of a company’s balance sheet rather than liquidity, market capitalization, or listing quality.

This represents a meaningful departure from TOPIX’s historical approach, which has been valued for its objectivity. Introducing a balance-sheet-based test without clear justification undermines the very principles that have made TOPIX a trusted benchmark.

2. The Definition of “Principal Asset Is Cryptoassets” Lacks Clarity

The consultation refers to companies whose “principal asset is cryptoassets” but leaves critical questions unanswered:

• Is the test based on parent-only holdings or consolidated holdings?
• Would exposure through wholly owned subsidiaries, affiliated companies, or strategic equity stakes be captured?
• Would indirect exposure via securities, derivatives, or economically similar instruments count?
• Is the inquiry formal (direct legal title) or substantive (economic exposure)?

These questions are not mere technicalities—they determine which companies the rule applies to. Index methodologies gain credibility from rules that are objective, measurable, and consistently administrable. A clearer definition would benefit issuers, investors, and JPXI alike.

3. The Rule Could Be Easily Circumvented

A practical concern arises from the definitional ambiguity: if direct Bitcoin holdings by a parent company trigger the rule, but equivalent exposure through other structures does not, the rule becomes sensitive to legal form rather than economic substance. Consider the following asymmetries:

• A direct Bitcoin position would likely trigger the rule.
• A position in the iShares Bitcoin Trust ETF (IBIT) would likely not.
• A position in a listed Bitcoin miner would likely not.
• A stake in a crypto-linked subsidiary would likely not.

This creates a perverse incentive for companies to restructure their crypto exposure to avoid the rule, defeating its intended purpose and introducing unnecessary complexity.

4. The Rule May Harm Legitimate, Regulated Businesses

The proposal targets companies whose principal asset is cryptoassets, but many of these firms operate within Japan’s regulatory framework. For example, Metaplanet and Remixpoint are fully regulated entities with legitimate business models tied to corporate treasury practices. Excluding them based on asset composition rather than performance or compliance risks penalizing innovation and discouraging investment in a strategically important sector.

5. TOPIX’s Continuation Buffers Already Address Volatility Concerns

TOPIX employs continuation buffers to manage volatility and ensure stability in its indices. These buffers are designed to prevent abrupt inclusions or exclusions due to short-term market fluctuations. A crypto-asset screen, which introduces a new layer of judgment, could undermine this stability by creating arbitrary barriers to inclusion for otherwise eligible companies.

6. The Rule Sets a Precedent for Subjective Index Methodology

If JPXI introduces a crypto-asset screen, it sets a precedent for other subjective criteria in TOPIX’s methodology. Index providers are expected to maintain neutrality and objectivity, and introducing asset-class-based exclusions could open the door to further ad-hoc decisions. This risks eroding trust in TOPIX as a benchmark and complicates decision-making for investors who rely on its consistency.

7. A Better Path Forward Exists

Rather than deferring companies based on asset composition, JPXI could consider alternative approaches, such as:

• Monitoring the performance and compliance of crypto-exposed companies over time.
• Implementing additional disclosure requirements for crypto holdings.
• Collaborating with regulators to ensure crypto-exposed issuers meet all applicable standards.

These measures would address concerns about risk and volatility without penalizing legitimate businesses or deviating from TOPIX’s objective methodology.