After months of heated debate, the Japanese government finally recognised Bitcoin as a legitimate payment method earlier this year on April 1.
For a long time following the fall of the Bitcoin exchange service Mt Gox, digital cryptocurrency was a hot topic. It all began in February 2016, when Japan’s financial regulator began to mull over legislative revisions to consider digital currencies as conventional. By April 2016, a bill had already been passed recognizing Bitcoin as money and by May another bill was passed to regulate cryptocurrency exchanges under the Financial Services Agency (FSA).
Fortunately, the new law put in place by Prime Minister Shinzo Abe’s government means that Bitcoin falls under anti-money laundering/know-your-customer rules throughout Japan, as well as being categorized as a legal method of payment. There are now a number of requirements, cyber security regulations and operational protocols, as well as employee training schemes and annual audits that are all in place to ensure Bitcoin is used correctly.
Throughout many other countries such as the UK, Australia and the US, Bitcoin is already a successful method of payment. For example, in a few countries, patrons can use Bitcoin at a number of physical and online stores including Subway, Microsoft, Expedia and Steam. Within Asia alone, Japan has fallen behind when it comes to the adoption of alternative payments especially when compared to China and South Korea, where 50% of the population already uses cashless options.
Luckily for Japanese cryptocurrency enthusiasts, Bitcoin is already achieving great success throughout the nation. By May 21, Bitcoin was worth $2,000 due to increased demand from Japanese and Chinese users. In fact, Japan was responsible for a 55% rise in trade volume at the time, while the difference between Chinese and US exchanges narrowed from 20% to 5% in a week.
This has in turn encouraged companies to get involved in Bitcoin. For instance, Remixpoint has partnered with Peach Aviation Ltd to allow patrons to pay for tickets using Bitcoin. Meanwhile, Infoteri has been looking at ways shareholders can place proxy votes using blockchain, the foundation of Bitcoin tech. One particularly exciting development is the introduction of BitCasino, the first licensed online Bitcoin casino where Japanese players may soon be able to play slots and other traditional casino games due to other new laws regulating gambling throughout the country.
On June 5, the Japanese government even released a growth strategy that centres on doubling the digital payment adoption rate over the next decade, so even more companies are sure to embrace the cryptocurrency.
Of course, there are still a few kinks to work out. According to Nomura Research Institute’s Yasutake Okano, more legislation may need to be brought in to deal with the technology used. Additionally, the Tokyo Stock Exchange is witnessing some volatile shifts due to companies using Bitcoin, with renowned day trader Naoki Murakami claiming that not everyone can trust Bitcoin exchanges just yet. Thankfully, the Accounting Standards Board of Japan is already working on new standards regarding digital currencies.