Japan has managed to build a solid reputation in the cryptocurrency community. This is not a big surprise, having in mind the general attitude of the nation towards all things tech ever since the middle of the 20th century.
However, it has to be said that cryptocurrencies are more complex phenomena than widespread tech consumer goods and similar products that found their bases in Japan. As a technology that includes a hard-to-explain process of both record keeping and wealth generating, the crypto market has mostly struggled to find a foothold. Now, it looks like Japan is fast becoming just that – a big economy where there is a collective support for the cryptocurrency concept, both from the government bodies and the population.
In fact, some believe that the recent slump of crypto prices will be turned back in the long-term once the big recovery starts in Japan. Here are some of the factors that can be relevant to this process, of course, if and when it begins to unravel in the land of the rising sun.
The CAA Report
The narrative about Japan started recently after a particular report on the state of cryptocurrency engagement in the country. The report was compiled by the Consumer Affairs Agency, also known as CAA. The report touched on several elements of the crypto market in Japan, including the number of its users and the most common inquiries it received about the same space.
In 2017, the number of inquiries that came to CAA were three times the number of those the agency got in 2016. This continues a steady rise that began even before 2014 and the Mt. Gox debacle. The same number got many analysts wondering about the upcoming months in the global cryptocurrency domain.
The idea is that Japan’s population is more than ever interested in the process of owning cryptocurrencies and investing in this field. Yet, there are many aspects of the rising interest and not all of them are related to the potential of a large number of people getting into crypto or starting companies that work in this ecosystem.
The Exchange Initiative
At the same time, 16 cryptocurrency exchanges started an organization that will have the objective of self-regulating their activities. This is exceedingly important because Japan was one of the key reasons why the cryptocurrency prices went up so drastically in 2017. Back then, the government’s decision to legalize bitcoin payments in the nation was seen as a huge green light for many BTC investors and the bull run was on.
In many ways, the listings of bitcoin futures financial products with US financial companies in late 2017 was directly related to Japan’s institutional decision. If Japan with its 127 million citizens started to accept bitcoin as legal tender, why US companies should not do the same?
Yet, at the same time, Japan has the same problem as many other nations with a vibrant cryptocurrency scene – how should this be regulated by the government? Chinese example shows a drastic and heavy-handed approach of basically cutting companies off from certain products, services or even accounts. Japan was clearly determined to do something less destructive but still attain a level of regulation.
In a very smart move, the exchanges working in the country and catering not just to Japan but to the global market decided to move preemptively and try to work with the regulators by setting up their framework. This cannot be a bad decision by any stretch of the imagination. Even if the regulators decided to go in some completely different direction than that of the exchanges, the very act will force them to work with the crypto companies. This in itself could prove to be an invaluable early warning system for all 16 companies.
At the same, the public is also getting a strong message that the exchanges are fully compliant with the law, even if they are first to the table. This is always a smart move because the public, or at least some parts of it, could still perceive the cryptocurrency field as somewhat shady business domain, even though this was disproven time and time again.
Quiet Big Business Moves
While all of this is going on with the exchanges, Japanese companies are moving carefully into the crypto space. Some, like Yahoo Japan, are doing it directly and openly, but many others are moving in the same direction but with a lot less public attention.
Even in 2017, a number of non-crypto companies used the legal status of bitcoin to procure funds in this cryptocurrency form. Most believe that this was a process of portfolio diversification, even if chances for another boom like the one in the previous year still remain small.
The same companies will certainly jump on board any new price rise, along with many additional ones. There is a clear potential in cryptocurrencies and many in the corporate world will not hesitate to tap into it.
However, gauging which companies are invested in cryptocurrency and with how much funds is an almost impossible matter. One thing is sure, however – there will be more Japanese companies buying into next big crypto breakout than there were in 2017.
A Land of Tech
Finally, there is a single undeniable fact about Japan’s potential in this regard – for better or worse, it is a land of technology. In this nation, some of the most advanced tech consumer goods, like G3 carrier protocol, were available long before anyone else had them.
Japan was deeply involved in eSports along with South Korea before most of the world even knew that this phenomenon existed. That is the reason why the safe bet is to believe that Japan will be an important player in the new price jump cycle.
The country will play its part both in the business cryptocurrency buy-ins and with its private citizens. Right now, more than 3.5 million individuals in Japan are crypto investors. There will be plenty more of the same when bitcoin and other relevant digital currency networks begin to break out of their bearish territory.