Out of the crypto markets, Japan has been one of the hardest to crack for exchange businesses.
For those unaware, the Japanese cryptocurrency market has been riddled with hacks over its relatively large history, playing host to both Mt. Gox and CoinCheck, two exchanges that were hacked for hundreds of millions worth of digital assets. In Mt. Gox’s case, it was literally hundreds of thousands of Bitcoin; in CoinCheck’s case, it was millions of dollars worth of a cryptocurrency called XEM.
Due to this unfortunate trend, the local financial regulator, the Financial Services Agency (FSA), has implemented heavy restrictions on the industry, mandating exchange operators to apply for a license. The FSA is looking for proper security protocols and anti-money laundering systems.
While few exchanges actually make it through the gauntlet, LINE, the firm behind the renowned messaging app that shares its name, has just been approved to launch a cryptocurrency exchange in Japan. According to a report from CoinDesk Japan, LINE (or LVC Corporation, to be more specific) now has the ability to offer a cryptocurrency exchange to not only one of LINE’s most influential markets, but one of the largest crypto markets in the world.
A separate report from CoinTelegraph’s Japan branch states that the FSA will allow for LINE to offer the trading of Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC) and XRP.
This new Japanese platform is expected to be an extension/subsidiary of BitBox, a LINE-owned exchange launched in a majority of nations in July 2018 that was restricted from operating in Japan due to the aforementioned regulations.
Aside from an exchange, LINE has ambitions to launch an extensive blockchain network that will allow its millions of users to use decentralized applications. Last year, the technology firm unveiled five DApps — Wizball, 4CAST, Pasha, TAPAS, And Step.
Japan Needs Crypto?
While it seems as though the U.S. and China have recently been dominating the cryptocurrency markets, the need for something like Bitcoin is rising in Japan.
As you likely well know, the nation has a negative/extremely low interest rate policy, which has resulted in a massive unwinding of the local banking sector and the broader economy. With low interest rates comes an increase in investors’ propensity to buy alternative assets, like gold and potentially Bitcoin.
With rates in Japan only trending lower and the world entering a potential recession territory, the demand for Bitcoin and decentralized forms of money may only increase. And LINE may be important in processing those newfound capital inflows.