COINBASE HEADS TO JAPAN
San Francisco’s Coinbase will soon be adding to its existing 32-country presence with expansion plans into the Japanese market.
Japan is arguably the hottest market for the US-based Cryptocurrency Exchange. As of late March 2018, Japan’s Financial Services Agency (FSA) estimates the number of the country’s crypto traders to be at least 3.5 million.
Coinbase is the biggest U.S. digital-currency exchange by volume but has lacked a significant foothold in Asia, where the most energetic cryptocurrency trading in the world takes place. Their Singapore office has been a center of robust activity, but for the six-year-old company, a beachhead in Japan is expected to be a game-changer.
Dan Romero, Vice President and General Manager at Coinbase, announced the launch of their new Japanese office, citing efforts to accelerate Cryptocurrency’s “global adoption” as the main priority.
Nao Kitazawa, the former CEO of the Japanese electronic investment platform Money Design, will drive Coinbase’s expansion into the archipelago.
“Under the leadership of the highly-respected and admired fintech leader, Nao Kitazawa, our new office will lay the foundation for Japan’s crypto investors to access a range of Coinbase’s products.”
Mitsubishi Financial Group (MUFG), the leading financial services institution in Japan, has already invested 1 Billion Yen ($$$) in Coinbase and will assist with its expansion into Asia.
There have been some legitimate concerns of late following the January 2018 Coincheck hack that saw the exchange platform relieved of NEM tokens totaling $500M.
FSA IN ACTION
The FSA responded quickly, tightening its cryptocurrency regulations. Under Japan’s Payment Services Act, Coinbase will go through a stringent process to meet operational requirements for Japan’s more controlled and regulated digital currency environment.
In efforts to allay fears of those concerned with the potential for another token theft, Coinbase continues to work closely with regulators to improve security along with enhancement to the overall institutional investor platform.
The strict new licensing regulations have prompted some noteworthy changes in Japan, such as Kraken and HitBTC, to close their local exchanges. But that hasn’t stopped the technology hub from becoming one of the world’s most desirable locations.
WILL KRAKEN RETURN TO JAPAN?
In fact, even as Kraken was closing up shop, their official statement alluded to their future return. Kraken’s “Position on Regulation” criticized Japan’s virtual currency act, calling it both imperfect and a ‘good example’ of ‘reasonable regulation.’ Kraken wrapped up their position with an olive branch extension that ‘hopefully’ they will have an ‘opportunity to re-enter” the in-demand market, “in the near future.”
Bitcoin is currently trading against the Japanese Yen at more than 56% of the total market, nearly three times that of trading against the U.S. Dollar.
According to a recent survey of young men in Japan, 14% own Cryptocurrency in some form with 92% of those men doing so for investment purposes — as opposed to jumping on the trending bandwagon.
CRYPTOCURRENCY AS LEGAL TENDER IN JAPAN
Bitcoin is recognized as legally-acceptable means of payment in Japan, although some North America reports to the contrary. In September, Japan’s FSA officially recognized 11 separate companies as currency exchange operators, in a step that further demonstrated their support for digital currency. This followed on the heels of the April 2017 law that officially recognized bitcoin as legal tender.
Coinbase is expected to focus on major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) but does not currently support Ripple (XRP), a popular altcoin in Japan. With a current circulating supply of 39.2 Billion, Ripple may very well be Coinbase’s most significant competition.