Cryptocurrency is being regulated in many countries around the world, although with varying degrees by each government. While Switzerland and Malta have fully embraced cryptocurrency with open arms, China has continued to demonstrate some hostility toward the technology. Governments all over the world are taking different stances towards cryptocurrency and blockchain, without a one-solution-fits-all answer.
Japan is a unique example of regulation in the cryptocurrency industry, with its history in the face of the two most infamous exchange hacks in the world — first of Mt. Gox and then Coincheck. Since then, the Japanese administration has been active in its monitoring and tackling of problems caused by crypto exchanges.
With tight controls by the Japanese government, the nation’s exchange industry was ordered to provide services regarding cryptocurrency that emphasize safety, security, and effectiveness. While some companies failed to make the necessary improvements to reach the government’s requirements and had to cease operations, other joined hands to form a self-regulatory committee.
Though many have voiced their belief that overly strict rules and regulations will stunt the adoption of blockchain technology and cryptocurrency, damaging the fintech industry, the opinions expressed at the Japan Blockchain Conference suggest otherwise.
The first country to claim a leading position in cryptocurrency and blockchain technology would have to be China. At one point, the country had the most Bitcoin transactions by volume, a large number of investors putting in time, money, and effort to develop the blockchain technology and cryptocurrency ecosystem, as well as numerous companies and government agencies exploring ways to grow the blockchain and cryptocurrency industry.
On the other hand, China was also the first country in the world to declare a ban on cryptocurrency, from initial coin offerings (ICOs) to coin exchanges, and ultimately blocking its citizens from accessing foreign coin exchanges with the so-called Great Firewall.
For Japan, however, the country has been determined to step up and set out rules and regulations, in order to start its path towards becoming a pioneer in support for blockchain technology and cryptocurrency.
During the Japan Blockchain Conference, International Media Coordinator David Otto elaborated on the reasons behind Japan’s move to develop itself towards becoming a hub for cryptocurrency. He said that many factors were involved in Japan’s decision to push ahead with cryptocurrency, as the island nation has always been very forward thinking and continues to look for ways to innovate across all aspects of technology. Moreover, Japan has been a global leader in technology for decades. While today, it may not be the most prominent country in terms of technology and innovation, Japan still continues to produce innovation that is exported to the rest of the world.
Otto added that Japan has a large number of investors seeking new business opportunities, especially as Japan has a very low federal interest rate, with some years even dipping into negative interest rates. Both factors have driven investors to put their money in cryptocurrency and related digital assets, as they believe that the country will benefit from becoming a leader in cryptocurrency and blockchain technology.
Moreover, the private sector is proactive about implementing blockchain technology in their business operations, with international corporations from e-commerce heavyweight Rakuten, messaging provider LINE, and internet giant DMM all presenting the latest and most innovative technology at the recent Japan Blockchain Conference.
According to Otto, these companies are recognized in Japan and in many parts of the world and have all demonstrated keen interest in the development of blockchain and cryptocurrency. Experts also expressed confidence that with growing interest from the private sector, industry startups in Japan will be more eager to adopt cryptocurrency and blockchain, eventually making the technology more popular for mainstream users in the future.
However, it is undeniable that the most important player that will determine the future of cryptocurrency and blockchain is the Japanese government itself. The position of the administration is key to the direction of crypto in Japan, whether it fails to take off or succeeds and opens new opportunities to numerous businesses across different industries.
With its swift actions and regulations on cryptocurrency, the Japanese government has demonstrated that it intends for blockchain technology and cryptocurrency to become an integral part of businesses in the country, albeit under appropriate regulation.
Otto also disclosed at the Japan Blockchain Conference that the government aims to work towards a legislative framework, and various government agencies have expressed interest in promoting cryptocurrency and blockchain in the country.
He went on to say that the Conference was held with support from the Ministry of Economy, Trade, and Industry and attended by the Director-General of the Commerce and Information Policy Bureau, as well as the Director of the Information Economy Division. The City of Yokohama also demonstrated its support for the industry.
The eagerness of stakeholders in the cryptocurrency and blockchain industry in Japan was evident in the success of the Conference. Considering that Japanese citizens tend to comply with rules and regulations in doing business, the results of the event are expected to lead to more acceptance and adoption of the technology. The industry is also looking for sustainable growth with support from the government, rather than allowing cryptocurrency and blockchain to fizzle out as a trend in the country.
Otto added that conferences offer a platform for industry stakeholders to exchange knowledge, as well as network and forge new relationships. Many successful partnerships have been established through events like this conference, with the first Japan Blockchain Conference attracting interest in the country from crypto companies worldwide. With a large number of crypto startups as well as Japanese organizations and companies participating in the event, there are numerous opportunities for new partnerships to be formed among them.
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