Big in Japan. The different approaches to cryptocurrencies in Asia are plan evident in how two of its major countries, China and Japan, are handling Bitcoin.
While news that China reportedly wants to curtail wasteful Bitcoin mining is making headlines, Japan has warmly embraced the phenomenon. Both the government and general public have jumped in with the concept of cryptocurrencies.
And as many as 10,000 businesses in Japan are thought to be accepting Bitcoin.
This soft approach from the Japanese government has seen companies moving their offices and operations in the country — many of them from China, where many of these exchanges and firms were started.
The biggest question here is why Japan has taken this approach. Unlike regional rivals China and even South Korea, where regulators have clamped down hard on cryptocurrencies one way or another. What led to Japan welcoming it with open arms?
And that too, when Japanese investors are usually considered risk averse?
One of the main contributing factors is that the central bank that battles deflation is keen on ultra-low interest rates. This has left the public in a flux, with investors seeking places to find better returns on their cash. These folks are well versed in the complexities of market trading.
Particularly on foreign exchanges.
It was back in April last year that Japan passed a law recognizing Bitcoin and other virtual currencies as legal tender, becoming the first country in the world to do so. That said, the government did stress the need for transparency and financial stability.
All at a time, when China started clamping down hard on cryptocurrencies.
The China ban
China, meanwhile had a completely opposite attitude towards these digital currencies. First with the ban of ICOs, and then exchanges. This hard-nosed approach to cryptocurrencies set a huge precedent when it came to their acceptance in the country.
Korea also started taking steps towards its own style of ban on digital currencies, despite massive interest from the populace.
Singapore, on the other hand, also expressed caution, with the country’s central bank issuing a warning over cryptocurrencies advising the public about the risks of jumping in on what could be a bubble. This, despite the country wanting to become a fintech hub.
Japan, meanwhile, pioneered Bitcoin adoption, with not only Bitcoin ATMs, businesses integrating payment systems, and even salaries started to being partly in the original digital currency. This involvement of big companies and media exposure helped to increase awareness.
Couple that with the sense of security derived from government approval, and a whole new group of people were brought to the market.
And now, with the dawn of the new year, with China clamping down, Korea showing concern, and even Singapore moving in with a cautious attitude, Japan has become the heart of Bitcoin. The enthusiasm that people over there have for cryptocurrencies could be just what this nascent domain needs.
Big in Japan.