In the wake of the second largest cryptocurrency theft ever on January, 26, which triggered painful memories of the Mt. Gox hack in 2014 Japan continues to lead the way in the Asian Bitcoin market.
Japan will see tighter regulation but no ban
Despite being home to the two largest cryptocurrency heists in history totaling nearly a billion dollars and a traditionally conservative financial tendency the Japanese market is still enthusiastic about bitcoin and other cryptocurrencies.
As China maintains a complete ban on all cryptocurrency and South Korea bans aspects of crypto-trading including anonymous transactions, the most important aspect for many traders, Japanese authorities continue to embrace the technology.
In April of 2017, the Japanese government became the first to amend their banking act to recognize cryptocurrencies as both methods of payment and asset holdings.
Even after the theft of about $500 million from the Coincheck exchange last week in which weak security practices, storing customers coins in hot wallets connected to the net and without multilayered signature security, are to blame regulators have remained calm.
“We’ll likely see stronger regulations, but not a ban,”
said Credit Suisse’s Shiono.
Japan’s Financial Security Authority raided Coincheck offices for documents and computers to be used as evidence on Friday, February, 2 but this was after Coincheck had already declared they would reimburse investors up to 90% of their loses and would make an in-house evaluation of security protocols.
Experts on the ground in Japan are predicting more oversight of the markets by the FSA but also see cryptocurrency as already too important to the countries economic growth to put a stranglehold on.
“There are estimates that tax revenue from the cryptocurrency business, including capital gains taxes from individual investors and from corporations, could amount to 1 trillion yen (US$9.2 billion), though that is very speculative at this stage,”
said Takashi Shiono, an economist at Credit Suisse in Tokyo.
Japan invested in the future of cryptocurrency
Tokyo’s place as Asia’s financial epicenter has been diminished in recent decades by both Singapore and Hong Kong’s expanding influence. Many experts see cryptocurrency as a new path for Tokyo to regain its prominence.
As the world’s earliest adaptor to recognizing cryptocurrencies spending potential over 10,000 companies in Japan are now accepting payment in Bitcoin. Including Peach Aviation its largest budget airline which just announced that it will continue plans to accept crypto payments by March 2018 despite the Coincheck hack. Meanwhile, Mitsubishi UFJ Financial Group, the world’s eighth-largest bank, is developing its own cryptocurrency, known as MUFG Coin.