Japan has complex land when it comes to its economy. Once hailed as the biggest economic miracle of Asia, especially in the wake of the unprecedented destruction and suffering of WW2, the country is now in its decades-long recession. The hardship stems from a deep-rooted problem that the main engines of Japan’s economic growth are now seeing. On one hand, the manufacturing industry, the bedrock of export success in the 1960s and 1970s, is no longer able to compete with the output of places like China and India.
On the other hand, the research and development branches of the Japanese industry also do not provide the industry with new openings like they used to. Services and other industrial domains also operate in limited, mainly national, bubbles from which they cannot make that big move to the international markets. Now, the same problems are once again in the limelight as the current Prime Minister, Shinzo Abe, recently decided to retire from this position. With another year in his regular term, the news came as a shock to the country that is, like most places, presently struggling with the COVID-19 coronavirus pandemic.
But, the wheels of government must continue to turn and Japan is set to soon get a new Prime Minister. The man of the hour is Yoshihide Suga, the new leader of the governing LDP party and almost certainly the next Prime Minister. The cryptocurrency field is also anxiously observing this transition of power and hoping that it will be beneficial for the standing of bitcoin and other digital currencies in Japan. One thing is certain – Suga is not oblivious to the existence of cryptocurrencies.
Crypto in Japan
So far, the country had somewhat of a mixed experience with cryptocurrencies, even though it is considered one of the most forward in the way it regulates and overall approaches the same industry. On the more somber side, which has very little to do with the present government, the country saw two of the most relevant cryptocurrency hacks in history. These are Coincheck and the more important one Mt. Gox. Together, they saw just below one billion USD in cryptocurrency stolen from their exchange wallets.
For most countries, this would be a blinking green light to come crashing down with bans and other restrictive measures. Yet, despite its damage, Japan chose to begin the tough and complex process of regulation. Suga, to his credit, played a role in this process more than six years ago, when things like the price of a BTC token were still a complete unknown to the wider public not just in Japan but all over the world. The same role is now one of the main reasons why cryptocurrency enthusiasts and the growing crypto industry feel confident that Suga will be pro-crypto.
Recognition of Bitcoin
Japan had an interesting process which led to the recognition of Bitcoin as a commodity. The same was one of the key drivers of the bull run which took place in 2017. Besides the events in Japan, one of the biggest additional elements was the further appearance of Bitcoin Futures. However, on a national level, Japan and its legislative initiative to recognize Bitcoin was definitely the bigger element of the astronomic climb of the BTC price. Suba was the chief cabinet secretary in 2014. Back then he described this cryptocurrency as a commodity, and not a fully-fledged currency.
Previously he also supported the process of taxation of any digital currency, which was later on mirrored by most western nations including the United States. That year, he said that in the case of transactions and gains from the same moment of value, it is logical that the finance ministry considers ways to impose taxes. He is by no means inexperienced in the domain of cryptocurrencies. However, for anyone working in the same field in Japan, the question is not his previous record on crypto but what will be his future measures and decisions regarding this industry.
Some are considering these statements on taxation as less than friendly towards the crypto community. After all, that notion is too often connected to potential crackdowns and introduction of measures that are neither beneficial to the users of cryptocurrencies, nor do they offer to enforce an environment where businesses can develop that use blockchain or have access to digital currencies. However, no matter what is Suba’s direct take on crypto, the Japanese economy is rapidly becoming digitally oriented.
Even now, there are strong indicators where the economy as a whole in the country is going and the chances of him changing that course are almost non-existent. The present path forward was mapped out by the outgoing Prime Minister Shinzo Abe. As his loyal support and someone who has been elected to head the LDP party because of that stance, Suba is certainly not going to change anything major about Japan’s movement towards a digitally-focused economic setup.
Below this digital shift, which covers everything from social media expansion and esports adoption to a hard pivot of businesses towards digital procedures (many of which have been staunch resisters of this process) Japan is seeking to alleviate its economic problems. For this to happen in the modern world, the country needs to be able to allow individuals and small teams to generate new business opportunities. For a centralized and top-heavy Japan, this is not something that is close to the last 70 years of development.
Here, even in the entertainment industry, big entities like Nintendo have ruled for decades, allowing little in terms of exciting startups and unicorn businesses. Now, Japan realizes that these are a necessity of any modern society and here, blockchain tech holds an incredible promise. It could allow this opportunity to happen while it also offers a chance of embedding itself in old systems and improving them immensely. It is also easily connected to things like big data setups, artificial intelligence, fintech procedures, and many more cutting edge innovations that will surely fuel the next big industrial push. Like it or not, Suba will support these, and with that support, also allow the present crypto domain to expand its reach and relevance.