Spencer Kellogg | @TheNewTreasury
Japan, a country known for its progressive financial vision, has reported an unprecedented 3.5 million active cryptocurrency participants on the island. According to data released by the Financial Services Agency (FSA) more than 80% of traders are between the ages of 24-40. With a population well versed in the mechanics of blockchain technology and new regulations aimed at on-ramping the sector, the next generation of Japanese leaders possess an unbelievable opportunity to establish the major hub of global crypto finance.
In the upstart and highly speculative world of cryptocurrency, nationalism and regionalism can play major factors in establishing the value and viability of a given marketplace or asset. Regulations levied by governments can wildly affect the potential of blockchain companies and the SEC’s recent arrests at Centra headquarters have spooked many in the unregulated securities sector. Binance, one of the world’s largest cryptocurrency exchanges, recently moved their Hong Kong offices to Malta to shelter their exchange from the harsh regulatory climate of China.
NEO, the “Chinese Ethereum killer,” perfectly symbolizes how the relationship between continental governments and fintech startups can suppress or activate valuation in the digital landscape. Although cryptocurrency is generally a highly speculative market, a look at the NEO chart shows incredible volatility throughout the past year. During all of its short-lived existence, NEO and its investors have had to battle the perfunctory nature of a 20th-century monetary policy that keeps it and many other cryptocurrencies from maturing at even faster rates than we are currently witnessing.
Which brings us back to Japan. Japan is different. Japan is not China, a country who willingly invites fear into the market while investing heavily in the background. And Japan is not the blindsided United States who aggressively view the space as a political and economic threat to the strength of their inflationary USD. Japan is going the other way.
Although the nation has been home to two of the largest cryptocurrency exchange hacks the country remains a friendly, open platform for development. The fast-tracking of digital assets is reminiscent of similar foresightedness that made Singapore a dominant player in the worldwide marketplace. For Singapore, it was an import/export market built around their only port. For Japan, it could very well be crypto built thru nodes on the internet.
Japan has routinely found at the epicenter of crypto’s short history. In December, the Japanese exchange Coincheck was hacked for more than 55 billion yen ($533 million). Before that, it was the infamous hacking of Tokyo based Mt. Gox in 2014 that sent the price of Bitcoin spiraling for years to come.
In the aftermath of these watershed events, regulators and commoners alike have become familiar with the cryptographic assets of the 21st century. Today, Japan can barely find enough engineers to fill the gaping holes in knowledge and experience that exist in the beginning stages of adoption.
In the last month alone, rampant speculation has suggested that Yahoo could potentially buy a significant stake in the Japanese cryptocurrency exchange BitARG. The deal, reportedly worth upward of $20 million, would see Yahoo gain 40% ownership over one of the largest exchanges in the world. While Yahoo lost to Google in the early 2000’s search engine war they may be well positioned to win back a substantial valuation through the cryptocurrency market.
Japan’s move to the progressive front of crypto regulation has been in large part due to their loosened regulatory status. In what was hailed a major success throughout the crypto community, Japanese authorities labeled crypto as a legal tender last year. The new legislation goes into effect this month and companies throughout Japan are expected to play a significant role in the construction of this new open-ended digital ecosystem.
Of all the developed countries participating in the cryptocurrency space, Japan appears most likely to take advantage of the current chaotic landscape. With their loose regulations and technologically savvy demographics, we can expect to see Japan play a dominant role in the future of the digital asset sector.
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