Japan has been shoring up its bitcoin ecosystem for some time now. Since the Mt Gox debacle, Japanese law and policy makers are making an effort to regulate bitcoin in the friendliest way possible. Now Japanese merchants are reaping the benefits. According to a report on the Nikkei Asian Review, as many as 20,000 merchants in Japan could adopt bitcoin payments this year. This includes both on and offline merchants, making the possibility all the more remarkable.
Bitcoin Regulation in Japan
If merchants adopt bitcoin payments in Japan at the rate that the article suggests, that would be a testament to the advantages of thoughtful regulation. Japanese regulators avoided a strict definition of bitcoin in their regulatory efforts, and opened up opportunities for many different types of institutions to invest in the bitcoin economy. Additionally, Japan is set to phase out its tax on the sale of virtual currency later this year.
Taking Advantage of the Bitcoin Economy
With the backing of sound regulation, Japanese merchants can take full advantage of the bitcoin economy. This is especially important for Japan, since it hosts an increasing amount of Chinese tourists who are known to be sizable spenders. Chinese tourists coming to Japan constituted about 25% of the total amount of visitors who came into the country in 2016. Given that the Chinese government restricts capital outflows, many in China have opted to adopt bitcoin in order to circumvent the restrictions. Japanese merchants will thus have the potential to capture more Chinese consumption by adding a bitcoin payment alternative.
Other Countries Should Follow Japan
This perfect mixture of thoughtful policy design and the influx of visitors from China, which dominates bitcoin markets in terms of transactions and mining, has given Japan a great niche to take advantage of. Hopefully other countries around the world can follow Japan’s lead. Thoughtful regulation is key, and where it exists, the Bitcoin community should welcome it. If the Bitcoin community could take Japan as an example in order to work with regulators in their own countries, then we might see more merchants elsewhere adopting bitcoin payments.
How many countries will follow in Japan’s footsteps remains to be seen. In the meantime Japanese merchants will be able to enjoy their first mover advantages. 20,000 merchants is a substantial number, which has the potential to bring about more innovative services thanks to the lessons they will learn. Hopefully more merchants, investors and innovators will take advantage of the great regulatory environment and the unique opportunities that the bitcoin economy enjoys in Japan, and catapult it even further.
Click here to read the Nikkei Asian Review article.
Click here to read more about official 2016 tourism figures in Japan.