Having overtaken the US, Japan has become the world’s second Bitcoin market, after China. Will the Empire of the Sun move ahead of all to completely embrace digital assets?
Japan has recently overtaken the United States to become the world's second largest Bitcoin market. This development may come as a surprise to many considering the decline that the Japanese economy has had over the last two decades.
But will the Empire of the Sun move ahead of all to completely embrace digital assets?
A Galapagos environment
Japan is an unusual case even among developed nations. The insular nature of the country means that many Japanese think in the terms of Japan AND the world instead of Japan IN the world.
Historically Japan has always been delinked from most of the world by its own choice. It was only in the closing period of the Edo times, known as Bakumatsu, between 1853 and 1867 that Japan finally ended its isolationist foreign policy known as Sakoku.
During the period of Sakoku no foreigner could enter Japan nor a Japanese leave the country as the penalty for doing so was death. This historic isolation has had an impact on modern Japan.
What makes Japan different
Japan is also a special case when it comes to Bitcoin. The growth of Bitcoin in Japan is more or less driven by the unique factors which affect the local economy. These factors are a result of a deflationary trend which has now persisted for decades.
A change in demography has resulted in a rapidly ageing population. Measures taken by the Bank of Japan as well as the Japanese government have led to years of zero and now sub zero interest rates.
Kagayaki Kawabata says:
“Compared to other countries around the world there is no large gap between rich and poor in Japan where 96% of adults have a bank account. It seems that a wide-range of the population are interested in investment. For example, at Coincheck, there are 60 year-old traders who buy and sell Bitcoin at our exchange. Also, Japan is one of the biggest Forex markets. We assume that some of the population of Forex traders are also investing in Bitcoin. Furthermore, the Bank of Japan recently adopted a negative interest rate policy. Due to this policy, keeping money in the bank might diminish one's assets. Because of such a change in the environment, we think people in Japan are finding a better place to invest their money and Bitcoin is one which has potential.”
Zero Interest Rates Makes Bitcoin interesting
Zero interest rates are certainly a factor. Not only did Kaga of Coincheck echo sentiments about Zero and negative interest rates being a factor which are boosting Bitcoin in Japan but so did Ken Shishido, Co-organizer of Tokyo Bitcoin Meetup Group.
Ken Shishido says:
“More and more people are becoming more concerned about the government policy especially after the announcement of BOJ’s negative interest policy. However, very few people will be able understand Bitcoin and be able to buy Bitcoin as a long-term investment or ultimate hedge, in my opinion. For speculative purposes, the Bitcoin market is getting more attention from FX traders since the combined transaction volume of seven exchanges in Japan has now surpassed some 59,100,000,000 yen ($544M) as of April 2015.People love gambling, I guess.”
We also talked with Takao Asayama, CEO of Tech Bureau Corp (Zaif Exchange).
Asayama says to CoinTelegraph:
“Believe it or not, Japan has the largest forex trade market in the world, which is like 40%, as I know of. I believe Japanese people would love bitcoin trade as high-volatility product. Japan is kinda "late" by a year or two, compared to US or Europe adopting cryptocoins, once we Japanese do, which I always say "when it hits boiling point", market here could outgrow US or Europe, or even Chinese market. As a payment method, numbers of retail store accepting bitcoins are growing but still, it is kind of slow. That will follows other countries when more people earn benefit from trade.”
The Future of Bitcoin Shines Bright in Japan
Japan has recently proposed new laws which would give Bitcoin a legal status in the country. We have covered this in detail in a previous article.
Shishido told us that some young programmers and developers as well as internet companies in Japan are realising the potential of Bitcoin and are working on various projects in Japan. He thinks that this will have a good outcome. He is also of the view that Japan has a huge token and coupon market and there is a culture of collecting points at shops. Indeed. the Japanese almost always carry with them a pointokādo or a point card and use this sort of a card to collect points each time they make purchases. These points can later be redeemed for merchandise or other rewards. Shishido thinks that if Bitcoin can somehow find a break as a point card utility it will help it to go mainstream.
It is already very easy to buy and sell Bitcoin in Japan and all it takes is a smartphone according to Kaga. His own company Coincheck allows users to create an account instantly just by signing up with their Facebook account.
According to Kaga, some exchanges in Japan allow users to purchase Bitcoins in convenience stores! This sort of ease of use will probably help Japan leap ahead of other nations when it comes to digital assets.
Promoting Bitcoin awareness in Japan
Bringing Bitcoin to more people in Japan is something that is as much of a concern in Japan as elsewhere.
Kawabata tells CoinTelegraph:
“Making Bitcoin accessible to ordinary people is key to promoting the awareness of Bitcoin in Japan. Unless ordinary people can find a practical usage of Bitcoin in their daily life, Bitcoin will stay as one of an investment destination or as a toy for geeks.”
His company Coincheck has integrated Bitcoin payment to more than 1,550 merchants and websites in Japan so that everyone can find a practical usage of Bitcoin. Practically every merchant who accepts Bitcoin in Japan uses Coincheck’s Bitcoin payment service.
Also, Coincheck started a donation-based Bitcoin crowdfunding service. Bitcoiners can now donate Bitcoin instantly to preferred organization just by scanning a QR code with a smartphone by using this service.
Shishido is spreading awareness about Bitcoin through his activities:
“I am co-organizer for Tokyo Bitcoin Meetup Group since 2013. (Roger Ver is the original founder and organizer but I run weekly and special events since RV is away most of the time.) Our group is the second oldest (founded in August, 2011) in the world (after Silicon Valley Group which was also founded by Roger in April 2011), and has held 193 meetup in the past. (the highest number of meetups in the world!).”
We can say one thing for sure that the future of Bitcoin is possibly to be found by looking east.
The world should astutely observe Japan for the potential applications of Bitcoin.