Introduction to Japan’s Crypto Regulations
Japan has been quick to regulate crypto, unlike many other countries. After the big collapse of Mt.Gox in 2014, a Japan-based company, the government took swift action. They saw the crypto industry as very risky and decided to implement strict rules. These rules were put under the oversight of Japan’s financial regulator.
The Unique Evolution of Web3 in Japan
Ten years later, Web3 in Japan looks different from other countries. Instead of a lot of small startups, big companies are leading the way into Web3. They are doing this through strategic mergers and acquisitions (M&A) and investments.
One of the most active players is Softbank. In 2022, Softbank acquired a controlling stake in BITPoint, a crypto trading platform. They also invested heavily in a Web3 venture fund started by Deutsche Bank. In 2023, Sony also joined the trend by launching a rebranded crypto exchange called S.BLOX. This was after they acquired a local platform, Whalefin.
Highlights from Japan Blockchain Week Summit
During the Japan Blockchain Week Summit in early July, it was clear that big corporations are moving into Web3. Many speakers from large corporations attended, which made the event stand out. This trend is unique to Japan. In the United States, companies like Coinbase and Base Chain are big contributors to Web3. We can expect similar synergies to happen in Japan too.
Japan’s National Web3 Strategy
Japan’s move into Web3 is part of a national policy started in late 2022 by Prime Minister Kishida Fumio. This policy includes tax reforms, rules for stablecoins and NFTs, and allowing investment funds to hold digital assets. These changes are expected to lead to significant developments soon.
Challenges for Small Operators in Japan
However, Japan’s strict rules make it hard for small operators to start from scratch. Daiki Moriyama, Director at the gaming-focused blockchain Oasys, says this is why M&A is popular. Starting a new crypto exchange and getting the necessary licenses is expensive and time-consuming. So, buying existing exchanges is a smart strategy.
For smaller companies, the high compliance costs can make it hard to be profitable. Teaming up with larger companies is a better way to stay in business and reach global audiences.
Impact of Big Players Like Sony
The entry of big players like Sony is also good for the crypto industry’s reputation. It can help change the way people see the industry, which was once viewed with skepticism.
Japan is showing that even strict regulation can provide the certainty needed by big companies. This approach is proving to be effective. It lays the groundwork for a strategic path into Web3 through acquisitions and investments. This can help bring crypto to new audiences and industries.
