Photo by Kanchanara on Unsplash
The return of Binance to the Japanese cryptocurrency market could see a new dawn for crypto in a country that had seen interest leveling out in recent years after an initial boom in popularity.
Binance stopped Japanese operations in 2018 following orders from the Financial Services Agency. The FSA is the government agency that regulates insurance sectors, securities and exchange, and banking in the country.
The reason Binance was ordered to stop is because of strict cryptocurrency exchange regulations that had been in place since 2017. The regulations require exchanges to be fully licensed in order to operate.
The purchase of Sakura Exchange BitCoin in November 2022 saw Binance acquire a licensed platform, announcing its return to the Japanese market. A name change to Binance Japan took place shortly after the acquisition.
This move took many in the industry by surprise as it appeared to be moving against the tide. Other global crypto exchange giants Coinbase and Kraken have recently announced a halt to Japanese operations, citing difficult market conditions.
While many may be questioning the decision to re-enter a market that others are leaving, others could see it as an astute move that will fill the void left by the other two major players.
The Potential Growth of Crypto in Japan
Binance Japan was relaunched on August 1st and offers users the opportunity to purchase and withdraw a variety of cryptocurrencies, including Ethereum and Bitcoin.
Cryptocurrency might not reach its peak of November 9th, 2021 when a single bitcoin was worth $67,617.02. However, the market still has a lot of value and with around 5 million estimated crypto owners in Japan, Binance still has a big market to target. With roughly 4% of the Japanese population owning some form of cryptocurrency, there is still huge potential for growth. With more and more online services accepting cryptocurrency as a form of payment, and a range of other benefits, the re-entry into the Japanese market could herald an exciting new era.
Potential Uses of Cryptocurrency
It is unlikely that the global or Japanese crypto market will see the rapid growth that generated huge interest in the early 2020s. However, the emergence of companies and services that facilitate the everyday use of cryptocurrency will open the market to an audience that may have looked at it as a novelty rather than a genuine alternative to official circulating currencies.
Globalization has been spurred on by improved internet access and quality as a result of 5G rollouts and the switch to fiber optic services. Many businesses have embraced online technology as a way to reduce costs and improve efficiency. A decentralized currency will only benefit from this as businesses find it easier to interact with other companies around the world.
The landscape of Japanese business has the potential to embrace crypto technology and Binance could benefit from this. The re-emergence of Binance in the Japanese market also has the potential to spark interest in other crypto uses.
Digital Payment
Using cryptocurrencies to make digital payments can improve efficiency and convenience. Without the need for banks and intermediaries, payments can be processed quickly and easily.
It also removes the issue of exchange rates when making payments to other countries. This could be beneficial to Japanese businesses carrying out international transactions.
Gambling
Gambling in Japan is strictly regulated, with limited markets available. This has led to increased online betting activities with offshore betting operators.
The lack of regulations around using online betting sites operated outside of Japan allows Japanese citizens easier access to greater sports betting markets and online casinos.
The potential for high revenues could see an update on gambling law in Japan in the future, but at present offshore betting offers the best options.
The rise of online gambling and cryptocurrency came about at the same time, so it is inevitable that the gambling industry would capitalize on this. Specially designed crypto casinos offer users a way to gamble directly with a variety of cryptocurrencies. They can also offer a range of enticing sign-up bonuses to encourage new users. This can include deposit matching with cryptocurrency.
Remittances
As of 2022, Japan had 1.8 million migrant workers. This number is double that from 2012 and underlines the importance of foreign workers to the Japanese economy.
Many migrant workers who work in different countries will send remittances back to family or friends in their native land. Regularly transferring money abroad can result in costly charges and are subject to fluctuating exchange rates.
Cryptocurrency offers an easier way to send money to another country and has significantly less expensive fees than traditional money transfers.
Investment & Trading
The hype around crypto investment appears to have died down considerably. However, there are still opportunities to make money. Investing in new cryptocurrencies can see users make a good return as their value grows.
As with any investment, there is an element of risk involved and a good knowledge of the market is essential.
Trading crypto allows users to capitalize on growth or minimize losses. Binance Japan facilitates the trading of cryptocurrencies for Japanese users and makes it easier for people to invest or capitalize on their investments.
Photo by Clay Banks on Unsplash
Privacy, Anonymity, and Protection Against Asset Sanctions
Some cryptocurrencies stand out from competitors by offering greater levels of privacy and anonymity when using them to pay for a product or service.
The decentralized currencies allow users to freely use them in any market that accepts them and also offer a level of protection against potential sanctions.
The freezing of assets can come about in a variety of ways. This can be due to police investigation, financial irregularities, or financial difficulties. Political instability can also have an impact on the ability to access funds from banks.
Cryptocurrency offers protection against this and can be accessed from anywhere as long as the owner has the information required to access their digital wallet.