The global financial crisis which occurred about a decade ago is credited with inspiring the invention of Bitcoin (BTC). Among the countries that have emerged as the largest markets for the virtual currency is Japan which now boasts of 61% of the worldwide trading volume for Bitcoin with 2.7% of the country’s population holding the virtual currency.
Japan also boasts of having been the first country to have a Bitcoin exchange. This was Bitcoin Market which was set up in 2010 on February 6 when the price of the virtual currency at the time was 30 cents. Bitcoin Market did not stay around for long as a scam led to its closure half a year later.
Series of hackings
Soon after Mt Gox, also in Japan, was set up. It was to meet a similar fate four years later after a hacking incident. At the time this was the biggest heist suffered by a Bitcoin exchange. There have been several others like the hacking of Coincheck, also an exchange located in Japan, where more than half a billion dollars was stolen.
Following the hacking of Mt. Gox regulations focusing on Bitcoin in Japan were proposed. This saw an amendment to an existing law which required banks as well securities firm from allowing Bitcoin transactions for customer accounts that were unregistered. The amendments came into effect last year in April and they additionally recognized virtual currencies as a method of payment.
Financial Services Agency
Currently Japan’s Financial Services Agency has licensed around 16 virtual currency exchanges. And following the hacking of Coincheck, the FSA increased efforts aimed at investigating Bitcoin exchanges besides the use of the virtual currency to launder money. The FSA also wants Japan Cryptocurrency Business Association and Japan Blockchain Association to merge.
This is because with such regulations in place reputable firms such as Da-ichi Life Insurance Company, Mizuho Financial Group, Sumitomo Mitsui Banking Corporation and SoftBank Investment have gained the confidence of investing in the Bitcoin exchanges. Consequently Japan is now the leading market for Bitcoin exchanges across the globe ahead of the United States and China.