Amidst regulations coming down of cryptocurrency in China and South Korea, Japan is becoming the main haven for the cryptocurrency. Seems it is benefitting not only from the downfall of those markets, but also from the pressure of its own reputation.
When it comes to cryptocurrencies, the leaders in Japan are finding themselves struggling to find a balance between wanting to protect consumers from fraud and wanting to hold up to their reputation as huge innovators. No doubt, their refusal to tighten the rules does put them at financial risk to some extent.
Japan is turning a blind eye to nearly every other nation in Asia and the world putting the clampdown on virtual currencies. Given the drastic price fluctuation that has left financial systems unstable, restrictions seem like a dire move to make. They also hold back the risk of fraud, terrorism and money laundering. In the end, it can be all or nothing for Japan. They are taking a risk in order to become the biggest cryptocurrency platform, but also putting themselves at major risk.
Japan bitcoin and yen-bitcoin transactions are now making up 40% of the global total. This makes them the world leader in terms of bitcoin trading. They even started recognizing virtual currency as a valid method of payment last year. Seeing the lack of regulation in Japan, it is predicted that they will soon shoot even further ahead, especially given that most traders will likely head there for future trading.
Takahide Kiuchi, an executive economist at Nomura Research Institute and former member of Bank of Japan’s policy board has already reported of these kinds of happens. “Crackdowns on virtual currencies overseas had led to moves to transfer investment money to Japan, where regulation is relatively slack.”
The Japanese government have to reservations on the issue. Taro Aso, the Japanese Finance Minister has stated, “I don’t think it’s good to regulate anything and everything.”