Market Overview

Japan Is Getting Serious About Cryptocurrency

Japan Is Getting Serious About Cryptocurrency

After a disastrous 2018, the cryptocurrency market is bouncing back in 2019.

Japan is one of the global hubs for cryptocurrency trading, and the Asian nation has been making plenty of cryptocurrency headlines in recent weeks.

Two New Players

YAHOO JAPAN COR/ADR (OTC: YAHOY) is set to launch a new cryptocurrency exchange, Taotao, starting in May.

Yahoo! Japan first took a 40-percent stake in Taotao, formerly BitARG, in March 2018 at a reported price of around $19 million. Taotao will initially allow trading of bitcoin and Ethereum and allow margin positions in Litecoin, Bitcoin Cash and XRP.

In late March, Japanese e-commerce giant Rakuten registered its own cryptocurrency exchange, Rakuten Wallet, with the Japanese Ministry of Finance.

Rakuten Wallet is the new name of Everybody’s Bitcoin, which Rakuten acquired in August 2018 for about $2.4 million. Rakuten Wallet will be one of the services offered by Rakuten’s payment subsidiary Rakuten Payments.

Other Crypto Headlines

Japanese companies have been making crypto headlines outside of the two new major cryptocurrency exchanges.

Money Partners Group announced a new deal with Japanese securities brokerage Daiwa Securities to launch a blockchain business, including an exchange.

Tokyo company DeCurret received an exchange operating permit from the Financial Services Agency to begin trading in five cryptocurrencies starting in April.

Japanese financial giant SBI Group, which recently launched its own exchange, said it will soon begin a partnership with an unnamed American company to produce cryptocurrency mining equipment.

Given the recent enthusiasm for cryptocurrency in Japan, adoption of digital currency is spreading like wildfire. Japan made bitcoin a legal payment method nationwide back in April 2017.

In March, ANN News reported the largest railroad and subway company in Japan, Japan Railways Group, is exploring the acceptance of cryptocurrency payments.

Rakuten is also considering accepting cryptocurrency payments. Bic Camera, Japan’s largest electronics retailer, has been accepting bitcoin for over a year.

Regulatory Concerns

Japan is already one of the 15 largest cryptocurrency trading hubs in the world in terms of trading volume, according to CryptoCompare.

But the more cryptocurrency trading becomes mainstream in Japan, the more regulators need to be concerned. An estimated $1.7 billion was stolen from cryptocurrency exchanges and investors in 2018, according to cybersecurity firm CypherTrace.

In addition, a March study from Bitwise found that 95 percent of daily bitcoin trading volume on is faked by unregulated exchanges.

Japan is hosting this year’s G20 summit in Osaka, and cryptocurrency regulation is already on the agenda as a topic of discussion. Japan has been hit particularly hard with cryptocurrency security problems: Japanese exchange Coincheck was the victim of a 2017 hack in which criminals stole $535 million in crypto.

Japan is considering a bill that would reduce the amount of leverage exchanges are able to provide to crypto traders; the country is also mulling a ban on advertisements aimed at increasing cryptocurrency speculation.

Japan's Deputy Prime Minister Aso Taro also recently said the government would no longer refer to cryptos as “virtual currencies” and will instead call them “cryptographic assets” to distinguish them from fiat currencies like the yen and the U.S. dollar.

The U.S. Securities and Exchange Commission has also been very leery of cryptocurrencies and has yet to allow a crypto ETF to trade on a major U.S. exchange due to concerns over market manipulation and investor safety.

Despite the headwinds, the Grayscale Bitcoin Trust (Btc) (OTC: GBTC) is up 50.9 percent year to date.

Related Links:

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Why The Bitcoin Bubble Is Different From All Other Bubbles


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