As Japan becomes a friendlier place for bitcoin with embracive legislation, over 10 Japanese companies are reportedly launching bitcoin exchanges to capitalize on the growing demand for the cryptocurrency.
According to a Nikkei report, the cryptocurrency industry Japan is about to grow exponentially with over 10 new exchange platforms – trading bitcoin and other virtual currencies – seeking to enter the market.
This frenzied interest among companies vying for a space in the digital currency ecosystem follows significant legal changes that are set to trigger a surge in demand for the cryptocurrency among investors, traders and everyday Japanese civilians.
In March 2016, the Japanese cabinet passed bills to recognize bitcoin and digital currencies as the digital equivalent of money. On April 1, Japan legally classified bitcoin as a recognized method of payment. Late last year, Japanese officials formally decided to end the 8% consumption tax rate imposed on bitcoin buying through exchanges, which is set to go into effect in July this year.
Japanese retailers have taken notice and have already made moves toward accepting bitcoin in the country. A handful of notable partnerships between retailers and bitcoin companies will see up to 260,000 retail storefronts accepting bitcoin by this summer.
A Regulated Industry = Boom
This time last year, Japan’s legislature enacted a bill that will see the regulation of operators of virtual currency exchanges, under the purview of the Financial Services Agency (FSA), the country’s financial regulator.
Exchanges are now required to obtain a special license to operate in the country. CCN has previously reported on the minimum capital and working requirements toward the license.
The Nikkei report reveals that 18 companies are planning to apply for the license, citing the Japanese Cryptocurrency Business Association. These include existing bitcoin trading platforms, like Japan’s largest exchange, bitFlyer. It is telling, however, that 10 out of those 18 companies looking for a license are new entrants in the market.
One of 18 companies seeking a license, is a bank-backed digital currency exchange that launched last year. Japanese financial giant SBI Group has already established SBI Virtual Currencies Co., Ltd., a digital currency exchange that enables trades between the fiat yen and cryptocurrencies like bitcoin and Ethereum’s ether.
The report also lists the web-hosting firm GMO Internet Group setting up its own digital currency exchange. Margin-based internet forex trading firm Money Partners Group and securities firm Kabu.com Securities are also reportedly planning to enter the cryptocurrency space.
The report reveals that none of Japan’s three megabanks are planning to start digital currency trading at this time. However, it’s notable that all three of them – MUFJ, Mizuho and SMBC – are investors in Tokyo-based bitFlyer, the country’s largest exchange by trading volume.
‘Digital currencies still occupy a small space in Japan,” the report adds. ‘ But they could catch on as a cheap way to settle payments and transfer funds in the future.’
Featured image from Shutterstock.Follow us on Telegram.
• Join CCN's crypto community for $9.99 per month, click here.
• Want exclusive analysis and crypto insights from Hacked.com? Click here.
• Open Positions at CCN: Full Time and Part Time Journalists Wanted.