One of the largest cryptocurrency companies in the world, Coinbase, just announced that it will be opening up operations in Japan very shortly.
Coinbase Japan’s First Steps
Although it may be easy for Coinbase to obtain business licenses in other countries, in Japan, it may be especially difficult.
Many see Japan as cryptocurrency hub, with many services and companies being based out of the Asian country. However, it has become a topic of controversy for Japanese regulators, as they try to attempt and control this often uncontrollable asset-class.
To help ease Coinbase’s entry into the Japanese market, its Japanese subsidiary plans to apply for licenses with regulatory bodies, more specifically, the Japanese Financial Services Agency. Once Coinbase Japan secures an operational license with the FSA, it should be smooth sailing for the exchange and prospective users of the platform. The Coinbase blog said:
“Upon our business registration with the FSA, Coinbase services available to Japanese customers will be provided with Japanese language translations for ease of use.”
Coinbase also affirmed that they will be working with Japanese regulatory bodies to form a high-level of trust between the two groups. With Dan Romero, VP of Coinbase, specifically stating:
“As a regulated, compliant crypto company in the U.S., we will focus on building that same level trust with new customers in Japan.”
Nao Kitazawa will be heading Coinbase Japan as CEO. Nao comes to Coinbase Japan with far from empty hands, holding a copious amount of experience in the financial technology sector. He was previously the COO of popular Japanese Fintech firm, Money Design. He also worked with Morgan Stanley’s Japanese branch for multiple years as an investment banker. The Coinbase blog noted:
“Nao’s passion for cryptocurrency combined with his extensive background provides Coinbase with a great foundation to successfully push into the largest cryptocurrency market in the world.”
With Nao also being on the board of the Fintech Association of Japan, it makes sense why Coinbase thinks that he will be well suited for the job.
Japanese Cryptocurrency Regulation
Just a few weeks ago, the FSA announced that they would be working with exchanges to help implement a five-point agenda into their systems.
Some notable points on this agenda include the introduction of an increase in KYC rules, a ban on privacy coins, and mandatory cold storage requirements for exchanges holding consumer cryptocurrencies. This rush for increased levels of regulation came after the $550 million hack of a popular Japanese exchange, CoinCheck, early this year. The lack of cold storage protection was the main factor to this devastating hack, with CoinCheck storing over $550 million worth of NEM tokens on an easily hackable hot wallet.
Rightfully, this threw Japanese regulators into a panic as they tried to ensure that a hack like this would not occur ever again. So far, this proposed plan by the FSA has already been successful, with CoinCheck delisting three privacy coins during May and other Japan-based exchanges making similar moves.
It makes sense that Japanese regulators will also enforce these newly formed rules upon Coinbase Japan in an attempt to ensure security for Japanese consumers. Although this increase in regulation may hamper its short-term success, Coinbase Japan has its eyes set on becoming a major player in the Japanese cryptocurrency market.
Image from Shutterstock