SBI Holdings chairman and SBI Group CEO Yoshitaka Kitao, who oversee the second largest financial institution in Japan behind Mitsubishi UFJ Financial Group, said that crypto and blockchain technology will accelerate the country’s economy in the long run.
“We want to take blockchain beyond financial. There’s a lot of speculative demand around cryptocurrencies, which is why the price is going up so quickly, but people need to think about how these technologies are being used in real life and how they can improve people’s businesses”.
Japanese Government Supports Crypto and Blockchain
Leo Lewis, a Japan-based financial analyst, said earlier this month that Nobuchika Mori, the longest-serving Financial Services Agency (FSA) minister in Japan, led the FSA and other major financial regulators in the country to welcome emerging markets, asset classes, and technologies.
In a column, Lewis emphasized that in early 2016, Mori realized that Japan was falling behind its neighboring countries China and South Korea in technology, fintech, and blockchain development due to the lack of practical regulations.
With strict capital controls and rigid regulatory frameworks, Japan has always been best recognized as one of the most conservative nations in Asia in regards to financial regulation. But, with the lead of Mori, Japan started to embrace startups in the finance, blockchain, and technology sector and eventually, with the imposition of practical regulations like the national licensing program for crypto exchanges, Japan became the largest cryptocurrency exchange market in the world.
“Mr. Mori knew, intimately, that Japan’s financial sector had fallen behind in IT, fintech, blockchain and its general embrace of the digital. Faced with an exciting, emerging genre that had already captured the imagination of the Japanese public, it must have been tempting to overlay on to crypto a load of pre-existing national ambitions centered on tech start-ups, fintech and encouraging more retail cash to flow around the system.”
The forward-thinking approach of the FSA combined with the support of the Japanese government and the country’s largest banks including MUFG and SBI Group, both of which are actively contributing to the global cryptocurrency sector and blockchain ecosystem, ultimately allowed Japan to evolve into a major cryptocurrency and blockchain hub alongside the US, Switzerland, and South Korea.
Consequently, Yoshitaka stated that the “boom” of the cryptocurrency market will happen in the next few years, echoing the sentiment of billionaire investor Mike Novogratz who previously noted that the next bubble in the cryptocurrency market will lead the combined valuation of digital assets to $20 trillion.
“[Cryptocurrency] is a global revolution. The internet bubble was only a US thing. It was rich US people participating. [Cryptocurrency] is global. There are kids in Bangladesh buying coins. It is monstrous in Tokyo, in South Korea, in China, in India, and in Russia. We’ve got a global market and a global mania. This will feel like a bubble when we’re at $20 trillion.”
The key factor that has led Japan to become the biggest cryptocurrency market in recent years is its national cryptocurrency exchange licensing program and the willingness of the Japanese authorities to implement regulatory frameworks that are created specifically for cryptocurrency exchanges.
The efforts of the Japanese government to regulate cryptocurrency exchanges in a different manner to banks and strictly regulated financial institutions created an efficient and safe ecosystem for cryptocurrency exchanges to thrive within.
In order for the blockchain and crypto to have a drastic impact on the economy of Japan in the long-term as emphasized by SBI Group CEO Yoshitaka Kitao, the Japanese government must maintain its positive and optimistic stance towards the blockchain and cryptocurrency sector.
Cover Photo by Arto Marttinen on Unsplash
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