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Despite its perceived frustrations, compliance seems to be an interesting concept that is entrenched in today’s Bitcoin world.
The largest bank in Japan, Bank of Tokyo-Mitsubishi UFJ (BTMU), has formed a strategic partnership with Coinbase to support the exchange’s long-term international expansion efforts. Some users complain about the exchange’s too strict compliance.
MUFG senior manager Yuichiro Kawasaki cited the reasons behind Coinbase’s ‘strong compliance systems was to prevent wrongdoing. Another factor in play has been the Coinbase’s licenses to offer money transmission services in many U.S. states.
As a part of the compliance procedures, now the exchange asks users if they are sending their coins to another exchange. “When sending money to external accounts, it says in its FAQ, “we are required to gather a bit of information before processing the transaction. Coinbase is federally registered as a Money Service Business (MSB). In order to comply with federal regulations, we must know if money is sent from a Coinbase account to a financial institution, in this case a bitcoin service or exchange.”
Since Tokyo-based bitcoin exchange, Mt. Gox, filed for bankruptcy in 2014 with customers losing Bitcoins worth hundreds of millions of dollars, the image of Bitcoin has been soiled in Japan.
This is likely to change now as BTMU, a subsidiary of the Mitsubishi UFJ Financial Group (MUFG), which has been conducting experiments on its digital currency, utilizing the technology behind the virtual currency Bitcoin and will be supporting Coinbase’s expansion focus in key markets in Asia and globally.
In Asia, prior to their partnership with BTMU, Coinbase had been operating only in Singapore. According to bank officials, Coinbase is set to raise about $10.5 million from investors, including MUFG’s core banking unit and an MUFG venture-capital fund. The fund will expand its operations beyond its current 32 countries.
Coinbase wrote on its website:
“At Coinbase, our mission is to create an open financial system for the world by building the bridge between financial institutions and the new world of digital finance. Partnering with leading global financial institutions is a key part of our strategy and we are thrilled to be working with BTMU.While we do not yet offer digital currency exchange services in Japan, we are committed to continued international expansion and look forward to working with BTMU to support this focus in key markets in Asia and globally.”
“At Coinbase, our mission is to create an open financial system for the world by building the bridge between financial institutions and the new world of digital finance. Partnering with leading global financial institutions is a key part of our strategy and we are thrilled to be working with BTMU.
While we do not yet offer digital currency exchange services in Japan, we are committed to continued international expansion and look forward to working with BTMU to support this focus in key markets in Asia and globally.”
Relatedly, Coinbase has informed its users that its Canadian payments provider, Vogogo, will be shutting down its payment processing business by August 1. This means that when it happens, Coinbase will no longer be able to support Canadian EFT transfers, Interac transfers, or the storage of customer CAD on its platform.
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