Japan has long been a beacon of light for crypto-currencies, despite a recent spate of government crackdowns.
While other countries in the region such as China, Vietnam and Thailand have clamped down heavily on cryptos, Japan was one of the first to legally recognize digital currencies as legal tender.
It has also put a solid regulatory framework in place. This week the Japanese Financial Services Agency (FSA) published a report, after investigating crypto-trading platforms in the country.
The results, taken from preliminary report findings, claim that Japan has over 3.5 million crypto-currency traders, equating to almost 3% of the population. The data was collected from 17 domestic crypto-currency exchanges and trading platforms following FSA investigations into know-your-customer (KYC) regulation adherence. The agency added that the number of traders is likely to be a lot higher since it only surveyed 17 out of the 32 crypto exchanges operating in Japan.
The report found that the most popular digital currencies that Japanese traders use were, unsurprisingly, Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin – these are also the top five crypto-currencies, by market capitalization, globally – and the majority of crypto enthusiasts in Japan were aged between 20 and 30.
The FSA also discovered that the total trade volume was as much as 5,000 times higher last year than in 2014, rising from 2.35 billion yen ($1.2 million) back then to over 10 trillion yen for the fiscal year of 2017. Over the past eight months the JPY has dominated Bitcoin trade volumes against other currencies with 40-60% of the total volume. At the time of writing JPY dominance stands at 60.63% according to Cryptocompare, making it the top country in the world for this asset class.
The popularity of the crypto markets in Japan has caused a few problems, such as a shortage of engineers and programmers and, as a result, salaries have risen 20-30% in the field. The recent hack of the Coincheck exchange also caused ripples across global markets and spurred a wave of regulatory measures to tighten security and customer protection on exchanges.
Yet, despite these issues, Japan still seems to be a sector leader as crypto-currency adoption continues to expand at an astonishing rate, with over 100 more crypto companies currently awaiting regulatory approval before opening their digital doors.