Japan is experiencing a boom in cryptocurrency operators with Singapore-based exchange Huobi the latest to secure its license to operate in the country.
After a merger with Japanese exchange BitTrade last year, Huobi Japan this week announced it is relaunching as a fully regulated exchange that is governed by the country’s Financial Services Agency (FSA).
Huobi Japan’s license, which is one of 17 issued under the FSA’s new cryptocurrency regulations, means it will start offering trades in Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Ripple (XRP), and Monacoin (MONA).
“This is an important milestone for us,” said Leon Li, Huobi Group founder and CEO. “Firstly, because the Japanese market is a very important one to us and, secondly, because working with regulators is a longstanding priority for Huobi Group. We’re proud to say that Huobi Japan now has one of the first 17 licenses issued under the FSA’s ground-breaking regulatory regime.”
Established in China in 2013, Huobi Group set up in Singapore in 2017 after Beijing cracked down on cryptocurrencies and now has operations across the globe. At its peak, at the start of 2014, Chinese media reported that Huobi accounted for 60% of the global Bitcoin trade, had 1.65 million user accounts and recorded daily trade volumes of more than 30 billion yuan which made the exchange the biggest digital asset trader in the world.
Japan is seen as one of the leading country’s globally, prompting the MIT Technology Review to release an article on Tuesday that asked: “Will people ditch cash for cryptocurrency? Japan is about to find out”. The piece cites projects by Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group, and SBI Holdings to develop cashless payment systems around blockchain.
Yet, at the same time, the country has experienced major failures with its cryptocurrency exchanges. In September 2018, the Zaif crypto-currency exchange lost $60 million, which seemed like pocket change compared to the January 2018 Coincheck hack, when over $530 million in crypto was stolen. Preceding these events, the infamous robbery of Tokyo-based crypto exchange Mt Gox, at the time the world’s largest virtual currency broker, saw 650,000 Bitcoin lost in 2014.
The MIT article says things have changed in Japan and noted the new technology being deployed to support this potential “cashless” network – developed by major mainstream players like US server specialist Akamai – and the fact that major Japanese bank and retail groups are heavily involved. It also argues “Japan’s financial regulators are more familiar with blockchain technology than any others in the world”.
That Huobi, one of the world’s biggest crypto exchanges, is trading crypto in Japan can only be seen as another step in the cashless direction.