GCR Trend Update 2020: Crypto Trends in Japan

GCR Trend Update 2020: Crypto Trends in Japan

Given the ongoing Coronavirus taking place around the world, having a large impact on the crypto activities such as conferences and communities, we continue to believe Southeast Asia (SEA) may be potentially spared as one of the breakout regions in the eastern hemisphere in 2020. As we emphasized earlier this year, we advise our readers to pay attention more to SEA this year.

Nevertheless, blockchain developments in China, Korea and Japan continue to develop. We share below a quick but comprehensive update on the crypto and blockchain trends in Japan from 2019 up until now. Checkout all the existing updates of the other Asian countries here.

Crypto Trends in Japan

Brief background on the crypto and blockchain happenings in the country:

Despite having been one of the earliest countries to introduce cryptocurrencies to its citizens, Japan’s cryptocurrency industry has reached a stall since the Mt.Gox hack and the subsequent exchange hacks that followed. As a result, the regulators imposed various regulations around crypto trading in the last few years. Nevertheless, it appears to be gradually opening up this year. Specifically, the regulators aim to provide more clarity around ICOs and STOs and it is anticipated to allow plans for security token offerings (STOs) next year. More recently in late 2019, several top Japanese securities firms established the Japan Security Token Offering Association (JSTOA). These firms including Rakuten, SBI, Monex, Daiwa and Nomura, with the aim to enable member institutions to launch STOs within a reliable regulatory framework safely. There have thus far been other associations formed in Japan to better address the security token question. Yet, this is the first association to include actual brokerage firms which will make FSA approval much easier. 

Simultaneously, Japan’s blockchain community has been developing various tools to support its crypto payment and financial ecosystem.

  1. Finance
    1. STO- Six major Japanese brokerage firms such as SBI Securities and Rakuten Securities officially established Japan Security Token Offering (STO) Association. Additionally, Securitize is partnering with the Japan Security Token Association (JSTA) to promote the creation of a security token ecosystem in Japan. 
      1. Investing- Major banks santander, MUFG lead $14M Investment in Securitize, a token issuance protocol. 
    2. Real estate on blockchain- Japanese commercial giant Sumitomo Corporation has partnered with a sister company of local cryptocurrency exchange bitFlyer to launch a blockchain real estate business. 
  2. Energy and power
    1. Trade on blockchain- Australian energy technology company Power Ledger and Japanese Kansai Electric Power Co. (KEPCO) have completed a joint trial of a blockchain-based system for post-FIT (feed-in tariff) surplus power in Osaka. 
  3. E-commerce
    1. Tokenized Gift cards- Japan’s largest gift card platform Amaten will issue tokenized gift cards in partnership with blockchain network provider Aelf. 
    2. Loyalty program in crypto– Cryptocurrency exchange bitFlyer and technology services company Tpoint Japan announced a new partnership that allows local customers to exchange loyalty program points for Bitcoin (BTC) and earn rewards for paying in crypto. 
    3. Surveys rewards in crypto- Cryptocurrency exchange Coincheck, a subsidiary of Japanese financial services firm Monex Group, partnered with marketing research company Macromill Group to launch the Coincheck Survey service that allows its users to exchange reward points for digital assets. 
  4. Crypto Trading and Exchanges
    1. International penetration- Licensed crypto exchange Huobi Japan has raised 5 million yen ($4.6 million) from Financial Products Group (FPG), a financial instruments business operator. 
    2. Exchange-  Japanese messaging giant Line launched its new Crypto Trading and Exchanges platform.
    3. Custody– Custodian BitGo expands Japanese presence, builds team. 
  5. Research on blockchain-  Cryptocurrency giant Ripple has partnered with Kyoto University and the University of Tokyo as part of its University Blockchain Research Initiative (UBRI). 
  6. Security using blockchain- A data-sharing initiative involving one hundred of Japan’s biggest companies will use blockchain for its security.

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