Japanese internet conglomerate GMO Internet Co., Ltd is launching a bitcoin trading platform on May 24th. The internet giant is one of many Japanese companies looking to capitalize on booming demand for digital currencies in the world’s biggest bitcoin trading market.
Recent legislative changes in Japan have led to an increasing appetite for bitcoin among investors and new adopters in the land of the rising sun. In April, bitcoin saw recognition as a legal method of payment after Japan’s cabinet passed bills to that effect last year. Japanese officials also took the decision to formally end the 8% consumption tax rate on bitcoin buying through exchanges, set to go into effect in July this year.
The benefits of bitcoin, a decentralized digital currency that enables near-instant, transparent and cheaper transactions compared to traditional counterparts in an embracive climate by authorities has retailers taking notice. Some notable partnerships between bitcoin companies and retailers will see up to 260,000 Japanese retail storefronts accepting bitcoin this year.
This boom in demand toward adoption has Japanese companies scrambling to provide supply to the market, with 18 companies applying for licenses to open an exchange. Last year, Japan enacted a bill toward the regulation of digital currency exchanges. Fundamentally, existing bitcoin exchange operators and those looking to open an exchange are required to obtain a license. 10 of the 18 companies seeking a license are new entrants into the market.
One of them, is the web-hosting giant GMO Internet Group which officially announced the GMO-Z.com Coin Co., Ltd. (aka Z.com Coin), a digital currency exchange that is set to launch on May 24th.
Z.com Coin was first established in October 2016 and was formerly known as the GMO Wallet Co., Ltd. In November, the company began testing its platform for virtual currency trading with the goal toward a full-fledged exchange operation.
And so it came to be, with Z.com Coin set to launch with two product offerings in ‘virtual currency foreign exchange’ and ‘virtual currency trading’.
With its first service, buyers can deposit money with the exchange operator and one side pays the difference between initial and final prices when a trade is executed. The new exchange says it will allow up to 5x leveraged trading, wherein buyers will be able to leverage their investment up to five times. This is akin to foreign exchange trading, hence the name.
At launch, its virtual currency trading service will only enable bitcoin transactions. The company plans on adding additional digital currencies in the future. Notably, the exchange will operate with zero trading fees and zero withdrawal fees.
A translated GMO statement explaining its foray into the bitcoin space reads:
In recent years, utilization of virtual currency such as bitcoin is progressing in various transactions such as international remittance and settlement to individuals and companies, and it is said that the market size of virtual currency will reach 1 trillion yen in a few years.
In Japan, various provisions for protecting consumers have been established by the revised fund settlement law which took effect in April 2017.
A registration system was introduced that requires the establishment of a system to carry out overseeing the exchange industry properly and reliably. This is expected to increase the health of the market. Furthermore, starting in July 2017, the consumption tax on the transfer of virtual currency will also be eliminated, so virtual currency usage is expected to spread exponentially.
Z.com Coin will store keys offline in a cold-storage with further risk mitigation through multi-signature offerings for customers. Further, GMO is also cooperating with Mitsui Sumitomo Kaika Kaisha Insurance Co., Ltd, gaining insurance against cyberattacks and theft.
The exchange is set to launch with 500 million yen (approx. USD$4.3 million) in capital reserves, dwarfing the 10-million-yen minimum regulatory requirement.
Pre-registrations for accounts at the exchange began this week and Z.com Coin adds that future development of the exchange will include enabling Ethereum and expansion into other Asian countries beyond Japan.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:49 AM UTC