The Japanese Financial Services Agency, shortened to FSA, is a government agency that is responsible for overseeing financial organizations like banks, exchanges, and insurance corporations. Just recently, they issued an order to a cryptocurrency exchange, demanding that they improve their operations to meet the FSA’s standards.
Minnano Bitcoin, a government-approved exchange for cryptocurrencies in Japan, was the exchange that received the “administrative punishment” handed down by the government. The FSA did an inspection of the exchange’s operations, and discovered it was “not performing appropriate verification at the internal audit in addition to the inadequate management and management system.”
The demands state that Minnano Bitcoin must do the following:
Building a business management system; Establishment of a management system for money laundering and terrorist financing; Construction of bookkeeping management system; Establishment of management system related to user protection measures; Construction of system risk management system and outsourcing management system.
May 14 is the deadline the FSA has created for the exchange to improve its internal organization, as well as write a report on its improvements.
Minnano Bitcoin is a “deemed dealer” of cryptocurrencies and other assets, allowing them to operate. Exchanges can become licensed, leading to less intrusion and investigation in the long run. Only two licensed exchanges have been ordered to improve their businesses in some way, while multiple other deemed dealers have been ordered to improve their operations.
I recently had the pleasure of spending six days in Tokyo, Japan. My wife, who works for a Japanese company in Bangkok, Thailand, was summoned for a business trip, and, being a teacher on summer break, I decided to tag along. It was an unexpected adventure and a worthwhile experience.
Although I have lived abroad in Thailand for the past seven years and essentially lived abroad in Hawaii the two years prior, I am not much of a world traveler. I have seen sights far beyond the beaten path throughout Thailand, but, through my years here, I have only ventured outside The Land of Smiles once: a 2-night guided tour to neighboring Cambodia. Other than that, my international travel experience is limited to a few family trips to the Caribbean when I was a kid.
To me, being a tourist is often more hassle than pleasure. I find the language barrier, the awkwardness of attempting to do as the Romans do, and the patronizing, inauthentic nature of tourist attractions to be a bit of a turn off. By the time you start to get into the swing of things, it’s already time to go home.
The worldliness I seek is gained from settling down in a new location for a lengthy stay and being subjected to cultural immersion. Immersion in Thailand has made me feel like a local. As odd as it may sound, I often feel more out of place when I come home to the US than I do in Thailand.
It must be made clear that my understanding of Japan, unlike my understanding of Thailand, is largely superficial. The account I am going to provide is one of first impressions, and first impressions are often misguided. Please take my observations with a grain of salt.
My overall impression of Japan is that it is more of a Conservative paradise than a Libertarian one, and most Libertarian aspects of Japan would also be present under Conservative guidance.
Before visiting, I had heard the phrase Ethno-Nationalism used to describe the structure of Japan. I find this to be accurate.
98.5% of Japan’s population is ethnically Japanese, and it shows. Tourists aside, I encountered only a handful of individuals who appeared to be descendants of other nations or regions, nearly all of whom were selling kebabs (literally). To put the monoethnicity of Japan in perspective, China, Italy, and Colombia’s ethnic majorities account for 94%, 92%, and 84% of their populations respectively. Japan is extreme in its lack of ethnic diversity.
In Thailand, construction workers, maids, and other low-income laborers often hail from poorer neighboring countries like Myanmar, Cambodia, and Laos. This runs parallel to migrant workers from Latin America present throughout the US. There are many jobs that Americans and Thais won’t or can’t do, so immigrants are welcomed to fill the void.
The Tokyo workforce, on the other hand, from hotel housekeepers to gardeners to line cooks, is as close as can be to entirely Japanese. Migrant labor was nowhere to be found.
Something else that stood out to me about the Japanese workforce, and also confirmed some prior knowledge, was its age. In Thailand and the US, airport staffs are often younger. I specifically remember college students ushering my wife and I into the appropriate queues before boarding our flight from Bangkok to Tokyo (it’s easy to tell in Thailand because student workers wear their school uniforms on the job). In Tokyo, I was amazed by the advanced age of many of the workers doing menial labor. Old folks helped to direct pedestrian traffic around job sites, worked behind registers at grocery and convenience stores, and drove taxis. The exceptions were baristas, waitresses, and many subway station attendants, who were generally more youthful. Skilled workers were also often elderly, especially construction workers.
I do not know the pretext of all of this. Does Japanese culture shun retirement? Do they tend to stick to a single occupation for life? Are competent younger workers in scarce supply?
Japan has the second oldest median age (47.3) of all the countries in the world, so that makes some sense of it. An older population will have an older workforce.
My wife suggested that Japanese culture requires many long years of preparation before an occupation can be obtained. If this is true, there may be younger workers waiting in the wings who are methodically learning the tricks of the trade. She also believes Japanese people change jobs infrequently.
On our Saturday afternoon in Tokyo, one of my wife’s colleagues, a Korean national married to a Japanese man, invited us to her home and to go out for lunch. Her husband owns several 711 convenience stores, and mentioned that he works long hours due to the challenge of finding and hanging on to reliable help. Perhaps a willing and able younger workforce simply does not exist.
Several of my days in Japan were weekdays, so my wife was in the office. As I mentioned earlier, I’m not a big fan of tourist attractions, so I spent much of my time wandering aimlessly through Tokyo’s streets and parks during the day (both of which were gorgeous and clean [and April is a lovely time of year to be outside in Japan]). Elderly Tokyo residents were often strolling around too. I was stunned by their fitness. Limber and lean, these senior citizens appeared to be anywhere from 60 to 110 years old, but I could never tell. Their faces were ancient as were the disciplined lifestyles they exhibited, most likely the source of their sprightly animation.
My wife’s colleague, while giving us a tour of her suburban community, informed us that several of the buildings we passed were reserved for the elderly. The sidewalks were crowded with these elders walking slowly and steadily, sometimes hand-in-hand with their significant others, sometimes alone. I do not know if these homes are funded through government welfare, private organizations, or the residents themselves and their families. Japan’s national spending is as exorbitant as America’s, so I would guess this is a product of the welfare state. Whatever the source of the funds, maybe older Japanese workers are fending off this fate by remaining useful.
The living quarters for these senior citizens appeared to be quite small, but this is no cause for concern. Japanese people seem to live happily in small spaces.
Space is a valuable commodity in Tokyo. Tables and countertops in Japanese cafes and restaurants are narrow and packed densely together. Bathrooms and toilets do not provide accommodation for heftier humans like me. Buildings are constructed in proximity of a few inches of each other. And roads leave little room for error. Every inch of Tokyo is utilized. The engineering and architectural efficiency is something to behold.
Is this a result of tight regulations and central planning? Or does Japanese culture, with its artistic prowess, taste for minimalism, and frugality, determine this result? I do not know.
If the latter is the case, it’s remarkable. If the former is the case, the cultural element certainly remains too impactful for analogies between central planning in Japan and America to be useful.
Americans, by and large (no pun intended), would not tolerate the spatiality of Tokyo. It is simply too tight. If applied to a place like New York, Japanese organization would be far less efficient because of how much extra space would be needed per individual for both physiological and cultural reasons.
The efficiency of Tokyo above ground is mirrored in the subways below: the trains in Tokyo run on time. The subway stations, like much of Tokyo in general, resemble those of New York, just ten times cleaner and smoother in every way. Thailand’s MRT is more modern, but it’s only a few years old and covers a small fraction of the city. The Tokyo subway map is not particularly tourist friendly (my wife and I threw away some time and money via erroneous ticket purchases), but it appears to be a spectacular success once you get the gist of it. Few systems are so efficient and so expansive at the same time.
Tokyo’s streets are largely vacant. Being used to Bangkok traffic, which is arguably the worst in the world, my perception probably exaggerates this, but they were largely vacant nonetheless. Tokyo residents commute with their feet and bicycles or in a subterranean landscape, so automotive traffic is not an issue.
Tokyo taxis were another wonder. I used taxis only twice during my stay. Both trips were impressive. The cabs were so smooth and quiet that they seemed to be switched off at red lights and on tracks when in motion. The drivers were terribly polite and considerate and did their jobs spectacularly well.
Unlike New York and Bangkok, there was a tremendous level of professionalism exhibited by taxi drivers and everyone else I encountered. Everyone was in uniform and acted in accordance with their corresponding professional stereotype. Taxi drivers acted like world-class chauffeurs, subway attendants were robotic in their customer service, businessmen/salary men never deviated from black suits and ties and black briefcases, and shopkeepers were clad in aprons and relentlessly tending to their merchandise when no customers were in need of assistance. Even the punks and goths I saw were such perfectly-kempt, cookie-cutter examples of their roles that they could be considered more conformist than rebellious. Being in Japan was a bit like stepping into a cartoon reality. Everyone knew their role and played it perfectly.
Perhaps more than anything else, this illustrated the Conservative (not Libertarian) way of life in Japan (and that is neither a compliment nor a critique, just an observation). While everyone appears to have equal rights and equal opportunities, social pressures and taboos keep everyone in line. There is a level of independence and individuality in the sense that one is free to choose his or her fate and how high to rise. But the structure in which one can move through is rigid.
Heritage ranks Japan 12 places behind the US on their Economic Freedom Index. In “Rule of Law” and “Regulatory Efficiency,” Japan and the US are similarly satisfactory. In “Government Size,” the two are similarly out of shape. The US’s advantage in the index comes from its “Open Markets.” Japan is far behind the US in “Investment Freedom” and “Financial Freedom” and a bit worse in “Trade Freedom.” This echoes President Trump’s complaints about both China and Japan’s undermining of foreign investment, and is probably why foreign influence in Japan is relatively weak (although his grievances about the difficulty of selling American cars in Japan makes little sense as there is not much of a market for cars in general, and Hondas and Toyotas are perfect for commuters anyway). The liberated individual mindsets prevalent in the US and the rest of the West do not exist in Japan as a result.
A closed and homogenous culture like Japan’s often leads to a high trust society, which Japan is. I had read about the incredibly low crime rates in Japan some time ago, and my expectations were manifested through my experience. I saw only five or six police officers the entire time I was in Tokyo, and they didn’t appear to be doing anything particularly serious. Even security guards were a rare sight.
And the four or five homeless people I walked past looked cleaner and had better-organized roadside sleeping-quarters than many ordinary Americans and Thais. One homeless gentleman’s cardboard mattress was spotless and cut in a perfect square, and his handful of belongings were stored and stacked neatly in boxes.
I am not sure that I have ever been anywhere that seemed safer and with people less concerned about being hurt or otherwise wronged than Tokyo. The shifty eyes and defensive postures cities usually bring about were nowhere to be seen. It was, counter-intuitively, a bit creepy.
While on a walk one day, I stopped to take a break and check my phone (okay, I was doing a “raid battle” in Pokémon Go… don’t judge me). When I stopped, I was unaware that the building beside me was a school. While I was loitering, a child no older than eight or nine exited the building. There were no guards or locked doors between the school’s exit and the side street, and no one accompanied the child. Presumably headed towards home, the child bounced happily down the road without a care in the world, and none of the pedestrians in the area paid any mind. I noticed unaccompanied children, usually in school uniform and carrying books and musical instruments, walking the streets and riding the subways in great frequency throughout my stay.
The laissez-faire lifestyles of these children made me envious on behalf of kids in Thailand and the US. Thai children are brought up to be scared of their own shadows, and going anywhere alone is treated as a plague, even for adults. In the US, Utah has recently enacted free-range parenting legislation, which shows that the US is not much better when it comes to comfort with children leaving the house unsupervised.
I have heard that when a diverse group of people are given a project, they tend to be better at solving problems and coming up with bright ideas than a homogenous group. But, to many liberals’ dismay, this is not because they hold hands and sing kumbaya. Conversely, it is a lack of trust that produces greater results. When there is less of a chance to join a tribe and become hampered with groupthink, creativity blossoms. When viewpoint diversity does not exist and everyone is on the same page, new ideas are harder to come by.
Japan appears to reap the rewards of a homogenous society without suffering its drawbacks. One of the most innovative and technologically advanced places in the world cannot be accused of a lack of creativity or problem solving. And the high-trust nature of Japan is easily observed.
Japan’s cultural conservatism, however, may lead to its demise sooner or later. This would take place in the form of economic calamity due to a shortage of human resources. To make a long story short, economic freedom has brought great wealth and a high standard of living to Japan. Paired with cultural conservatism, well-to-do families are everywhere, and they do not have to worry much about being the victims of crime, drug addiction, or medical injuries and ailments. Hard-working, unified, disciplined families incur greater wealth and avoid superfluous costs.
But greater economic status (often a result of investing time into one’s education and career) is highly correlated with having children at a later age and having fewer children overall. As a result, the population does not replenish itself, and the economy cannot be maintained.
Japan’s population has decreased by 2 million people since peaking in 2010. I do not know if this has already had serious adverse effects, more adverse effects than positive effects, or what it will lead to. But if population decline is generally a net negative, Japan might be in for some trouble.
Many wealthy nations, particularly in Europe, are also experiencing low birth rates. In recent years, they have supplemented their populations via increased immigration, typically from poorer nations experiencing population booms.
As you are probably aware, mass immigration in the West has led to a great deal of controversy. Political paradigms have shifted from Leftism vs. Conservatism to Globalism vs. Nationalism. Some credit immigration for economic gains and cultural enrichment, others say immigration is straining public services and causing crime rates to rise. Both may be true.
The fact of the matter is that Japan is not going the same route as Europe as of now. Becoming a Japanese citizen is not easy, and Japan has, notoriously, contributed next to nothing in terms of providing refuge for displaced Syrians and other peoples facing crises at home (again, I say this objectively, not to praise or criticize).
Based on my observations, the current status quo in Japan is one of small and tightly wound nuclear families. Everywhere I went on weekends and after school hours, was filled with parents (who generally appeared to be in their 30s and 40s) exploring the sights of Tokyo with one or two young children. These small families paid a tremendous deal of attention to their kids, investing in them a surplus of love and care.
During school hours on weekdays, I witnessed many grandparents walking around or playing with young children, and saw what appeared to be nursery school teachers pushing shopping cart/crib hybrids full of toddlers (one of the more adorable things I’ve ever seen) to parks and playgrounds. Financially, educationally, and socially, this was further evidence of the heavy investment Japanese parents make in their kids, which is typical in both humans and other animals that have fewer offspring.
Speaking of reproduction, something else that stood out to me in Japan, and drew sharp contrast to Thailand, was the regularity of public displays of affection. In Thailand, couples are almost never romantic in public. Even coming across significant others holding hands is a rarity. In Japan, couples of all ages were comfortable displaying their relationship status. I saw teens, twenty-somethings, working professionals, and charming older couples walking hand-in-hand everywhere I went. Kissing, hugging, and playful flirting were common too. This may seem unremarkable to someone from the West, but it stands out to residents of Thailand like me.
Also on public display were advertisements for adult entertainment. One of the first things I saw after getting out of my initial taxi ride was a poster showing a chesty and scantily clad young woman. The poster was in Japanese, so I cannot be sure what it said. All I could make out were the numbers 30 and 60 with corresponding prices. The area my wife and I stayed in was called Shinjuku, which, I would learn, is home to a red light district. There were establishments called “Men’s Clubs” all over and advertisements for massages, along with more posters like the first one I encountered. There were also hotels that had separate prices for “stay” and “rest.” I figured that those who pay the “rest” rate are not there to do a whole lot of resting.
One evening, my wife was feeling under the weather and did not want to leave the hotel room. I went for a stroll and a bite to eat by myself. Having no idea where I was going, I wandered into an area that resembled a cleaner and more pedestrian-friendly Times Square. My stomach was grumbling, so my eyes were mostly on the restaurants.
An older Japanese gentlemen wearing a suit, I would guess between 60-70 years old, accosted me, asked how my night is going, gestured towards the building he approached from, and proceeded to bluntly explain that this is a sex hotel where I can sleep with a woman or get a blowjob (his word, not mine). I thanked him for the offer, noted that I’m visiting with my wife, and went on my way.
I then met another of the small handful of foreigners working in Japan, a sharply-dressed man of African descent holding a clip board who shook my hand and asked if I would be doing any partying tonight. I told him that I’m a boring married man out for a bite to eat, and he let me know that I was walking through a red light district. This became more evident when I took another look around.
I exited the area, found a noodle shop, and Googled “prostitution in Japan.” As a Libertarian, I am a strong supporter of sex worker rights, and see no reason why adults should be prohibited from making a voluntary exchange that involves physical activity. If my brief bit of research was accurate, prostitution is absolutely illegal in Japan. However, you can get around the regulations by calling the service massage therapy or something else less explicit. In other words, prostitution is technically illegal yet effectively legal in Japan, in concurrence with most of the rest of the world.
This is a great demonstration of how laws fail to dictate reality and how legislation does not control human behavior.
Overall, Japan is not an especially Libertarian nation, not that I expected it to be. From a legal standpoint, it is roughly as free as any other country of first-world status. Freedom of speech and the press exist, and Japan’s social Conservatism and exceptional safety appear to be more of a result of its culture and values than its laws and law enforcement (in my opinion, social Conservatism, when established via societal pressures rather than governmental regulations, is in no way at odds with Libertarianism, though it may be more inhibiting). Japan’s economic structure is generally free-market Capitalism, but protectionism and nationalism prevent globalization from having a meaningful influence on the population and their way of life (which is good for societal cohesion in the short term, but may lead to economic collapse down the road).
As a foreign observer, I am wiser and more fulfilled having visited Japan. Spending most of my life in international and multi-cultural hubs makes experiencing a monoculture a cherished novelty that future generations may miss out on. I’m happy I got to see Japan as it exists today.
And did I mention that the sushi is like a dream? I may never be able to enjoy sushi again.
As a free-thinking and non-conforming individual, Japan is not the kind of place I’d like to settle down in. If my individuality is innate and not a result of my upbringing, I imagine that growing up in Japan would have been a nightmare, so I feel some concern for Japanese people who can’t find a role to play. But for those who are happy to follow routine as a cog in the machine, Tokyo is a utopia unlike any I could have ever imagined.
Recently, 16 crypto exchanges filed with the Japanese Financial Services Agency so as to create a new cryptocurrency organization according to Bitcoin.com.
This new organization aims to create a self-regulating environment. The Japan Virtual Currency Exchange Association will focus on self-regulating and will have the authority to investigate and sanction members that fail to comply with the self-regulatory methods.
The member organizations are Bitflyer, Money Partners, Bitbank, Bitpoint, Quoine, SBI Virtual Currencies, Fisco Virtual Currency, Btcbox, Zaif, GMO Coin, Bittrade, Tokyo Bitcoin Exchange (DMM Bitcoin), Bitarg Exchange Tokyo, FTT Corporation, Xtheta Corporation, and Bitocean.
Hopefully, this new organization will serve as proof that government is not the only solution to regulatory problems. Private institutions can organize to serve both themselves and the consumers.
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.
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.
Binance, one of the world’s largest cryptocurrency exchange services, has been suspended by Japanese regulators.
According to RT, the Japanese Financial Services Agency issued a formal warning to Binance on Friday. The Agency stated that Binance was violating Japanese fund-settlement rules, but were unclear as to whether or not it would be a criminal charge.
According to Alexa rankings, Japan accounts for about 9% of Binance’s visitors.
“No need to worry. Some negative news often turn out to be positive in the long term. Chinese have a proverb for this. New (often better) opportunities always emerge during times of change.” – Changpeng Zhao, Binance’s chief executive.
It seems that Binance has found its new opportunity. According to Bloomberg, the organization will now be seeking a fresh start in the Mediterranean. They have yet to provide a timeframe, but Zhao said “We are very confident we can announce a banking partnership there soon…Malta is very progressive when it comes to crypto and fintech.”
The crackdowns on cryptocurrency in China, Japan, and India have made Hong-Kong a difficult base for Binance.
Binance hopes to soon start a “fiat-to-crypto exchange” on the European island nation. This would allow people to exchange fiat currencies, such as the Dollar or Euro, for cryptocurrencies on Binance’s platform.
Currently, buying cryptocurrency with fiat is mostly limited to the cryptocurrencies that are on the Coinbase platform, which include Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. Opening fiat to crypto on Binance would allow users to buy many more kinds of cryptocurrencies.
Their other future plans include the creation of a decentralized exchange, but technology development for it has been slow.