Japan’s Financial Services Agency allows Bitcoin to be used to pay for goods and services in the country as part of an effort to foster a growing Fintech industry despite a glaring lack of any significant investment.
The Japanese Financial Services Agency announced earlier in the year that they would begin allowing payment for goods and services in bitcoin and require cryptocurrency exchanges to be licensed and audited, giving Bitcoin an actual approval when other countries such as China and Russia appear to be cracking down. Its all part of Japan’s attempt to grow its Fintech industry, an industry sorely lacking investment especially in comparison to Japan’s traditional manufacturing industry.
“The Japanese have felt that cryptocurrencies are a scary thing but trading volumes have increased as many now see it as trustworthy thanks to government approval,” says Yusuke Otsuka, chief operating officer at Coincheck.
The country last month issued 11 licenses to companies enabling them to operate as legal cryptocurrency exchanges. Previously no license was needed, with some seeing the new measures as unnecessary compliance issues which hinder smaller startups from competing in this environment.
Koji Higashi, Co-founder of IndieSquare, had the following to say about the recent regulations and their impact on smaller scale bootstrap businesses in the Fintech sector:
It’s hard to say whether the regulation in Japan is more costly than the Bitlicense but I can say it’s expensive enough to put serious financial pressure on startups and may force them to go out of business completely in some cases.
Lacking Investment in The Fintech Arena
Figures show that Japan’s investment in this sector has been lacking in recent years, particularly when compared to that of the US and the UK where in 2015 they have invested $12 billion and $974 million respectively. These figures, compared to Japan’s relatively paltry $65 million, paint a rather poor picture of the country’s commitment to the Fintech industry. Despite its low investment, the country is optimistic.
Takuya Fukumoto, Director of Industrial Finance Division in the Ministry of Economy, Trade, and Industry (METI) stated:
We’re hoping that fintech will change economic and corporate activity.
Is Japan doing enough, or are they failing bootstrap fintech entrepreneurs with unnecessarily expensive compliance issues? Let us know what you think in the comments below.
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