Taking a Closer Look Inside the Growing Japanese Cryptocurrency Culture and Bitcoin Landscape
Japan has always been a key player in the crypto landscape, from the home of Satoshi Nakamoto to being one of the fastest adopters of cryptocurrencies.
Just over a month back the land of the rising sun appointed Takuya Hirai as as Minister of Minister of Science, Technology, and IT. Hirai is a member of the ruling Liberal Democratic Party (LDP) and has been at the forefront of charting the course of blockchain when he was Chair of the Liberal Democratic Party's IT Strategy Special Committee.
This is one of the numerous signs that has shown that Japan is bent on staying at the top in the crypto ecosystem.
Although traditionally, Japan has been known as a nation of conservative investors who put their money in low-yield risk-free assets. The arrival of cryptocurrencies seems to have changed that.
When it comes to crypto trading, Japan seems to way ahead of every country. In mid-2018, Japan had more than 60% of fiat to bitcoin transactions. They did not even hold back on the Stablecoin trend this summer. Japanese Yen was the top four cryptocurrencies.
The Ripple Effect Of The Hack
It would be safe to assume that the regulatory history around cryptocurrencies were shaped by a series of hacks that took place in the country.
The world’s largest crypto exchange platform in 2014, which used to be responsible for more than 70% of all Bitcoin’s transaction, was infiltrated by attacks. The hackers stole a of 850,000 BTC for a total of $473 million. This did not just hit the exchange, but cryptocurrency in general was affected, slamming the price of Bitcoin into the pit, and many lost faith in the viability of the digital currency.
However, after the attack Japanese financial regulators took a series of steps to protect their country’s crypto consumers. A number of bills were introduced.
It wasn't till 2018 that Japan witnessed another major attack. On January 26, 2018, not less than $534 million worth of NEM coins which is equivalent to 523 million NEM was on carted away from Coincheck exchange in a theft case. Due to the size of the dough involved, the saga drew attention from far and wide.
The impact was huge. The entire POS application “Mobile Payment for Air Regi” belonging to Recruit Lifestyle was connected to this exchange. It was connected to over 260,000 shops in the country.
How Are Crypto Traders Affected By Regulations?
Following the legalizations of cryptos, 8% of VAT was removed from taxes. Although traders still have a lot of taxes to pay. In Feb 2018, the the tax department issued a revised bill which says that traders must pay 15-55% of profits.
The decision was polarising. While crypto enthusiasts complained about high taxation hurting the economy, may believed it was the necessary measure for regulations. The regulators also tightened the noose around KYC and AML.
Widespread Presence Of Bitcoin
BTC has been accepted by both large and small businesses in Japan. Payments are done through POS solutions provided by crypto exchanges. Even air carriers, hotels, major retail chains use bitcoin.
However, Japan is still far from becoming “fiat-free.” There are still a range of service like leasing a house, metro tickets and more that can’t be done through cryptos. Although the country has the largest network of Bitcoin ATM.
In addition to Bitcoin, local Japanese crypto like MonaCoin (MNA) and Cardano (ADA) are pretty popular in the country.