Was Mt Gox saga a cryptocurrency trigger in Japan?
The word Bitcoin in Japan has for the longest time been associated with theft, Ponzi and fraud because of the 2014 Mt. Gox saga. Mt Gox was a Tokyo based Bitcoin exchange that suddenly shut down after realizing that they had been hacked. 85,000 Bitcoin worth over $450Mat the time was missing and were thought to be stolen. The CEO was arrested and charged with embezzlement and fraud.
Around the same time however, local-based Japanese crypto currencies sprung up. Monacoin, a popular currency used to buy goods online, especially among online gamers, being one of them. After a period of growth and supportive legislation, Japan amended her laws to allow virtual currencies as a legal form of payment earlier this year.
This, coupled with the fact that China and Korea had recently outlawed ICO and crypto trading activities, saw a huge leap in Bitcoin’s price to over $7,000. Their exchanges were also flooded with startup requests for coin offerings from all over the world.
The Financial Services Agency (FSA) approved use of Bitcoin by setting rules that allow the masses to pay for their transactions using Bitcoin. This move necessitated and made it mandatory for participants to be licensed and comply with audit rules as set by the regulatory body. Audit was set annually.
The result? Widespread use of the currency by major stores, merchants and retailers as majority saw it as a government approval.
Some of Japan’s biggest organizations including Bic Camera, the leading electronics retailer, Capsule-Japan’s largest budget hotel, Chain and Peach-a major budget airline operator have partnered with Bitcoin exchanges and are now accepting payments Bitcoins.
Later in September, FSA approved 11 cryptocurrency exchanges and 17 virtual currencies.
Bic Camera, a dominant electronic retail seller, has especially triggered uproar in using Bitcoin as a payment method.
There have also been several multi-billion dollar organizations that have come up their own platforms with divergent visions.
Point in case is Remix, a major electric grid operator, came up with BitPoint. BitPoint is an exchange associated with Bitcoin that can be used to process electric and other bill payments in Bitcoins from consumers.
When Bitcoin became accepted in Japan, an estimated 4,500 stores accepted Bitcoin as a formal payment method. The number has since sky rocketed to 22,500 and the number is expected to increase as more and more people readily accept this coin as a form of payment.
Japanese take of ICO and Regulation interpretation
The water is still murky when it comes to the interpretation of the financial securities being issued as there are no clear regulations on the matter.
A token that is packaged like a financial security sold in an ICO can be considered a collective funding scheme which is protected by the FSA’s Financial Instruments Act so long as the payment is in fiat currency e.g. Ether.
Japan hopes that the Fintechs sector which crypto trading falls under changes the economic and cooperate activities by making back office functions digital, calling for an increase in cashless consumer payments and developing new technologies that will enhance cash flow between companies.
The sector faces setbacks such as scarcity of entrepreneurs and start up with a majority of young people looking for jobs in existing companies. The gaming sector that thrives more in the country also tends to attract more programmers and IT engineers.