Cryptocurrency in Japan: Gov't-approved exchanges to have self-regulation system to ease safety concerns

World
Europe

While China and South Korea are cracking down on cryptocurrency exchanges, Japan's been welcoming the virtual currency. But the hype may be fading thanks to a recent theft and Bitcoin's latest volatility. Mayu Yoshida reports.

These are the Virtual Currency Girls. They're an all-girl pop group on a mission to educate people about the usage of digital tokens. But with the recent volatility in virtual currencies, their popularity could soon fade. In fact, some shops in Japan have stopped accepting Bitcoin as payment, like this sushi restaurant in Tokyo's affluent Ginza neighborhood.

KEN NAGAHAMA MANAGER, GINZA NUMAZUKO "It's been about a month since we stopped accepting Bitcoin payments. But it's starting to take a toll on our sales, so we want to resume it at some point, but not with Coincheck."

MAYU YOSHIDA TOKYO "A $500 million heist recently at currency exchange Coincheck prompted authorities here to improve risk management and prevent the criminal use of such money. While the move may have lessened the hype of Bitcoin in the country, some experts say such regulations are also a good thing that could lead to safer transactions."

PROFESSOR EMIN GÜN SIRER CORNELL UNIVERSITY "Better regulations on exchanges can ensure that the exchanges themselves are based on well-known practices to keep their coins safe. Another thing we should see is the increase in public awareness of risks involved in these assets."

Long-time Bitcoin evangelists couldn't agree more. Mai Fujimoto, who goes by the name "Miss Bitcoin" says the 2014 bankruptcy of the Mt. Gox exchange and the recent Coincheck hack have prompted people to look for accountable exchanges, not dodgy ones.

MAI FUJIMOTO "MISS BITCOIN" "The Coincheck case is really regrettable because a very large amount of money was stolen. But I also think it helped users improve their literacy and rethink their strategies to keep their coins safe. Also, unlike past hacked exchanges, Coincheck has promised customers that they'll get their money back, which is something it should get credit."

To regain the lost trust of digital tokens, government-approved exchanges in Japan will set up a self-regulation body in April. And with Bitcoin still largely banned in its Asian neighbors, there's still plenty of room for Japan to keep this crypto momentum going.