SBI Securities’ trading revenue surged 19% in 2019 due to the inclusion of SBI VC Trade crypto affiliate in July, SBI Holdings says.
SBI Securities’ trading revenue surged 19.2% in 2019, largely due to the inclusion of the company’s crypto investment wing, which turned a $7.1 million loss into a $30 million profit over the year.
Japanese financial services giant SBI Holdings released its new financial report on Oct. 30. The report analyzed results for the six-month period ended Sept. 30, 2019 and witnessed major growth of SBI’s crypto-heavy venture capital arm in 2019 amid a general decline in SBI’s revenue.
SBI VC Trade profits grow over $30 million over a year
According to the report, SBI VC Trade’s profit before income tax expense has seen a considerable increase in the first half of the fiscal year (FY) 2019. The number has surged from 765 million Japanese yen ($7.1 million) in losses in H1 FY2018 to as high as 3.2 billion yen ($30 million) in profits in H1 FY2019, the firm said.
SBI Holdings noted that SBI VC Trade, an SBI affiliate that operates a crypto asset exchange, became a subsidiary of SBI Securities in July 2019.
SBI’s crypto mining business SBI Crypto surges $10 million
Alongside notable growth of crypto exchange-driven profits, SBI has also recorded a significant increase in profits from its cryptocurrency mining business SBI Crypto, according to the report. As such, the business’ profit before income tax expense added almost $10 million from 783 million yen ($7.2 million) in losses in H1 FY2018 to 293 million yen ($2.7 million) in H1 FY2019.
SBI added that it also expects a further increase in the scale of crypto asset mining due to new miner operations within the year as well as in-house miner operations in 2020.
Earlier this year, SBI established a dedicated division for manufacturing crypto mining chips.
Further advances with Ripple
Similarly to previous financial reports, SBI has again outlined the growing importance of Ripple’s technology in its remittance division, SBI Remit as well as the development of Ripple’s xCurrent-based remittances. SBI noted that its Ripple-connected subsidiary SBI Ripple Asia is expected to cover nearly 50% of the overall Ripple network once the connection is activated.
On Oct. 1, Cointelegraph reported on SBI Securities and five other Japanese brokerage firms including Rakuten Securities setting up Japan Security Token Offering Association.
Chinese President Xi Jinping’s announcement that the country would invest heavily in blockchain technology – coupled with a sweeping move to remove online posts suggesting such technology is a scam – has nourished optimism long-held by crypto advocates. Of course, the reality is that China’s marked shift towards pro-blockchain policies is part of a much wider trend which has seen Asian multinationals and governments embrace the considerable potential of distributed ledger technologies.
President Xi’s announcement centered on the creation of a state-backed digital currency (a stablecoin tied to the renminbi), an idea which has been gestating since the country’s central bank started exploring the possibility as far back as 2014. With the dawn of a new decade, a law will come into effect on January 1 with the aim of “facilitating the development of the cryptography business and ensuring the security of cyberspace and information.”
It is predicted that the currency in question will launch soon after, although perhaps the possibility of blockchain technologies powering the continued transformation of China’s vast industries is of greater significance. Xi specifically mentioned that the technology could be applied to realms including finance, public services, employment, education and infrastructure management. It’s all a far cry from 2017, when the government imposed a general ban on all crypto businesses and exchanges. From deep suspicion, to a state-supervised (albeit heavily surveilled) cryptocurrency, in just two years is quite a turnaround.
Soon after the announcement was made, the local government of Guangzhou announceda $150 million fund for outstanding blockchain projects, with more initiatives expected in the near future.
Local Guangzhou gov just announced a 10B RMB (~$150M USD) government funding dedicated in “blockchain subsidy” for “outstanding blockchain projects”
More details below
I believe all other local govs will follow, overall capital subsidy can be massive
Needless to say, the news – which provoked ahuge spike in search traffic for terms like ‘blockchain’ and ‘bitcoin’ – hasn’t harmed the prospects of Asian crypto projects in general, with stocks of various blockchain companies in the regionsoaring. On the markets, some of this week’s biggest beneficiaries have been Chinese blockchains, even if there’s nothing to suggest they’re due to receive an influx of fresh business from government enterprises. In fact, six of the seven best-performing crypto assets in the top 50 this week have Chinese origins. Bitcoin cash, up 38% in the past seven days, is the only outlier.
Other companies seem to be riding the wave or at least benefiting in a roundabout way from the prevailing mood music: South Korean conglomerate Samsung has just announced the integration of Tron (TRX) with the Blockchain Keystore found on the Galaxy S10. As well as facilitating the creation of decentralized applications (dapps) running on the Tron ecosystem, the Keystore will let users access and trade TRX directly from the wallet on their handset. Perhaps coincidentally, industry sources are mulling over rumours that Samsung is outsourcing a part of its smartphone manufacturing to China.
Samsung has been experimenting with blockchain technologies for some time now, and with their growing dapp arsenal, their long-term strategy seems positively crypto-centric. It isn’t the only smartphone company testing the blockchain waters either; Taiwanese electronics giant HTC has also invested heavily in decentralized services and a blockchain-powered handset, the Exodus 1, and its successor, the 1s, which can run a full Bitcoin node.
The Xi effect visualized: A look at #bitcoin on-chain transactions during the days of the 40% price spike.
Chinese waking hours: # of Txns: 169K Txn Volume: 475K BTC Avg Txn Value: 2.8 BTC
Other hours: # of Txns: 175K Txn Volume: 962K BTC Avg Txn Value: 5.5 BTC
The long-term effect of China’s increasingly pro-blockchain outlook remains to be seen, and until its state cryptocurrency is hatched and various policies put into action, we won’t be able to quantify the consequences for blockchain technology and digital currencies more generally. That said, interest in the region is largely unrelated to the President’s ringing endorsement; according to a report by the Financial Times, Chinese companies have filed more patents on blockchain than companies from any other region in the world. A significant percentage of bitcoin mining is concentrated in the region, and many of the largest cryptocurrency exchanges are either based or were founded in the Asian continent, from Beijing and Singapore to Hong Kong and Tokyo. Regardless of its real ramifications, Asian crypto companies were never going to let President Xi’s decree go to waste.
Do you think China’s pro-blockchain legislation will benefit Bitcoin? Let us know in the comments section below.
Images courtesy of Shutterstock and Coincodex.
Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.
From Cointelegraph Japan: This week’s selected cryptocurrency and blockchain news.
In this week’s selected cryptocurrency- and blockchain-related news from Cointelegraph Japan, cryptocurrency exchange Huobi Japan receives a $4.6 million investment, Bitcoin.com acquires blockchain startup O3 Labs, and Ripple CEO Garlinghouse criticizes the Softbank Group.
Here is the past week of cryptocurrency and blockchain news in review, as originally reported by Cointelegraph Japan.
Crypto exchange Huobi Japan secures $4.6 million investment by FPG AIM
Huobi Japan announced on Oct. 25 that it has raised close to $4.6 million through a third-party capital raise led by FPG AIM, a Japan-based financial services company. FPG aims to expand its business in the financial services field in cooperation with Huobi.
FPG further explained that the investment was “focusing on the future potential of the company that operates a virtual currency exchange that can provide new financial assets and payment methods.”
Bitcoin.com acquires Japanese blockchain startup
Cointelegraph Japanreported on Oct. 21 that Roger Ver’s Bitcoin.com has acquired the Japanese blockchain startup O3 Labs. Bitcoin.com will develop mobile financial services for Bitcoin Cash through the acquisition of the startup, which develops wallets for NEO and Ontology (ONT). Bitcoin.com wants its users to be able to manage, operate and spend without the need for traditional banks and financial institutions.
Experts express concern over crypto donations to politicians
The Japanese government recently determined that cryptocurrency donations to individual politicians are legal. Under the country’s Political Funds Control Law, contributions to politicians by individuals and companies are basically prohibited. Corporate contributions are limited to political parties, and individual contributions are made to separate political organizations.
However, as cryptocurrencies are judged not to be a form of money, the Ministry of Internal Affairs and Communications said that cryptocurrency contributions to individual politicians are legal.
While such contributions are not expressly prohibited, some experts have expressed concern regarding their use. A local entrepreneur Noritaka Okabe has called for reform to campaign laws regarding individual donations, stating:
“Being able to donate to an individual politician is a big bug. It is a distraction to the purpose of the system of the political funding report. It should be revised as soon as possible.”
Ripple CEO criticizes Softbank
Ripple CEO Brad Garlinghouse criticized the SoftBank Group, which agreed to spend more than $10 billion to take over WeWork and pay off its co-founder Adam Neumann to relinquish control. Garlinghouse took aim at Softbank’s WeWork and Uber’s massive stakes, which he claims have caused corporate value inflation.
The Financial Action Task Force takes a closer look at Japan
The Financial Action Task Force (FATF) will take a closer look at Japanese cryptocurrency exchanges and related financial companies. The FATF will examine the country’s policies against money laundering and how it ensures that virtual asset providers, including exchanges and wallet providers, meet the required criteria. The FATF said:
“In the actual visit, the review team will meet selected representatives of the public and private sectors depending on the country’s risk context […] a candid and unbiased discussion between Japanese government agencies and private companies will be involved.”
Here is a list of where and how to secure ownership rights for businesses and real estate through a blockchain.
The use of blockchain to cement ownership rights for real estate and business has been ongoing since 2016, when the technology was first used to organize new forms of registries and registration of transactions. The blocks are used to record information onto the blockchain system, which can then certify the process of transfer of ownership of the property or entity.
This process excludes intermediaries that collect commissions in the process of, for example, conducting real estate transactions while also lowering the risk of fraud. Specialized blockchain platforms can prevent data forgery and simplify the process of checking real estate objects or business debts before deals take place.
That is why, in 2016, the National Agency of Public Registry of Georgia launched a blockchain project on land management with the Bitfury Group. In 2017, the State Land Cadastre of Ukraine switched to the Exonum platform for private blockchains, which is also supported by Bitfury.
The latest move came in early October this year in the United Arab Emirates, as the Department of Economic Development of Dubai announced a transition to a blockchain-based platform for the single enterprise market. The platform is designed to increase the convenience of doing business in Dubai and enable agents to obtain a license for managing trade licenses and corporate clients.
Thus, governments of different states are increasingly participating in, or encourage the creation of registries and are looking to record ownership through the blockchain. So, here is a list of countries where registries are either piloted or already used.
In the U.S., blockchain has been interacting with the real estate sector for some time now, and different companies are trying to occupy this attractive niche. In 2014, major U.S. retailer Overstock.com began to accept BTC payments and founded its subsidiary Medici Ventures to invest in blockchain projects. One of the venture’s projects was Medici Land Governance, which has been developing a global land blockchain registry since 2018.
Medici Land Governance uses blockchain and other technologies to support land management, appropriation and administration through a reliable public registry of land ownership. The project currently operates in the U.S., Zambia, Rwanda, Mexico, and St. Kitts and Nevis, where memorandums of understanding have been established with local governments.
Another Californian blockchain-based real estate company, Propy, aims to connect buyers and sellers through smart contracts in a peer-to-peer system that enables users to acquire properties completely through the blockchain, fully avoiding paperwork and mediation. This is useful for global real estate transactions, where various national laws confuse the process.
In January 2018 in South Burlington, U.S., the project began pilot tests for the purchase and sale of real estate, and in March 2018, the company conducted the first real estate transaction completed on a blockchain in the U.S. without any intermediaries or signing of physical papers. The government of Vermont accredited and registered the deal on a smart contract that exists in the form of an electronic QR code containing all the necessary data on ownership rights.
In Delaware, where over half of all publicly traded U.S. companies are registered, state representatives announced in summer 2018 that they plan to launch conceptual proof for a blockchain-based business filing system that will allow corporations to take advantage of smart contract technology for automatically tracking stocks and securing assets in real time. Previously, Delaware had signed a contract with IBM to develop an electronic distributed ledger based on the Hyperledger Fabric blockchain structure.
The Swedish land-ownership authority Lantmäteriet began testing blockchain technology in 2016 in cooperation with telecommunication company Telia, consulting firm Kairos Future and blockchain company Chromaway. As a result, a pilot project was presented to develop future real estate transactions by using smart contracts that aimed to significantly reduce the time it takes to sign contracts, register a deal and ultimately sell a property.
The project consists of three steps, with the first one being an experiment to demonstrate the technology’s potential. On March 30, 2017, the second stage ended with the release of a report that showed how the preparation of smart contracts automates the processes of cadastral operations.
To conclude a sale and purchase transaction, the buyer and seller do not need to use a notary. It is enough to provide digital signatures that are checked automatically. The third phase was to enable the actual transfer of land rights. On June 2018, developers completed the first successful transaction on the platform.
Swiss blockchain startup Proxeus joined with IBM Switzerland, Canton Zug and Swisscom in April 2018 to create the first register based on blockchain technology.
The project shows how a variety of parties, such as an entrepreneur, lawyer, bank, notary and commercial register can digitize their workflows through the use of IT systems integrated into banks and the commercial registry, which already exist with the Hyperledger blockchain and smart contract.
The project was a part of the Digitalswitzerland Challenge, a joint initiative of several leading Swiss companies aimed at stimulating the digitization efforts across the country and creating an alternative to the cumbersome process of registering a business in Switzerland.
In the fall of 2018, the National Land Registry of Great Britain — Her Majesty’s Land Registry (HMLR) — decided to use blockchain for maintaining land cadastre, announcing plans to digitize its data. The plan was called Digital Street and should take up to five years to complete.
The use of the technology should simplify the record-keeping process for ownership of land and real estate. The blockchain will protect this information, making it possible to avoid unnecessary bureaucracy. In April 2019, HMLR announced that the prototype blockchain was used to sell a house in Kent.
The process, which included the sale of the duplex in Gillingham, Kent, was designed to show how to buy and sell a house as easily and quickly as possible by demonstrating a digital transfer of ownership.
The Russian state program called “Digital Economy” launched in 2017, which included making use of blockchain technology in the public sector. The Ministry of Economic Development and the Government of Moscow plan to jointly implement a pilot project on the use of blockchain technology in the real estate registry.
Transferring an existing real estate registry to the blockchain will mean that all the data on any property will be made available to interested parties, including a full list of past owners as well as the debts and persons registered to the property. The next step should be the transfer of sales contracts in the form of smart contracts, which cannot be changed retroactively.
The Federal Service for State Registration, Cadastre and Cartography (Rosreestr) was one of the first to register an equity agreement in this way in 2018. In the future, blockchain will be used in interactions between the Rosreestr with the Foundation for the Protection of the Rights of Participants in Shared Construction, where property developers pay insurance premiums.
The representative of Rosreestr explained that a larger project for recordinging all Moscow’s real estate transactions on a blockchain was also in the works, but is still being organized past its initial launch date of January 2019.
In March 2019, IBM and the National Council of French Commercial Court Secretaries announced the development of a corporate registry solution based on blockchain technology.
A blockchain network will be used by clerks working in commercial courts throughout France and will provide additional transparency and efficiency through improved management of legal transactions related to the life cycle of companies. The network also allows the sharing of a single version of the truth between court clerks and provides tracking of notifications related to changes in legislation.
The government of Japan began to find ways of implementing real estate transactions into blockchain back in 2017. Different ministries and real estate companies in Japan have their own real estate databases, which the government opted to unify.
Pilot testing of the state blockchain-based real estate registry began in summer 2018 in several cities across the country. If successful, the Japanese government will fully transfer the state registry of real estate to the blockchain over the next few years.
In April 2017, the U.S. company Ubiquity LLC announced that it is collaborating with the land registrar offices of two Brazilian municipalities by recording land ownership information on the Bitcoin blockchain.
The company implemented this pilot project together with the Brazilian real estate registry Cartorio de Registro de Imoveis in the municipalities of Pelotas and Morro Redondo. According to project developers, the ongoing pilot program aims to move away from paper records to a 100% digital solution.
FSA-licensed crypto exchange Huobi Japan has raised $4.6 million from Financial Products Group, a financial instruments business operator.
Licensed crypto exchange Huobi Japan has raised 5 million yen ($4.6 million) from Financial Products Group (FPG), a financial instruments business operator.
The development was revealed in a press release shared with Cointelegraph on Oct. 25.
Future cooperation on digitized securities
Huobi Japan is a wholly-owned subsidiary of major Singapore-based crypto exchange Huobi, which serves traders across over 130 countries.
The platform launched this January as a fully compliant entity after a merger with BitTrade — one of only 16 crypto exchanges at the time to have secured a license under the aegis of Japan’s national financial regulator, the Financial Services Agency (FSA).
According to today’s announcement, FPG and Huobi Japan will jointly focus on providing support for new financial assets and payment methods.
In addition, FPG Group says it anticipates a possible future collaboration with Huobi Japan to further the digitization of Japan’s securities market by combining its expertise as a financial instruments business operator with Huobi’s blockchain technology.
Japan’s exchange regulatory regime
A license has been mandatory for all crypto exchanges operating within Japan since the amendment of the country’s Payment Services Act back in April 2017. The FSA evolved increasingly strict requirements for license applicants in the wake of a major $532 million hack in January 2018 of local exchange Coincheck.
Coincheck went on to secure an FSA license in January of this year. Other regulator-approved exchanges include LVC Corporation — the digital asset- and blockchain-focused arm of Japanese messaging giant LINE — which was granted a license this September.
Founded in China in 2013, Huobi Group has been headquartered in Singapore since Beijing’s crackdown on domestic crypto-fiat exchanges in September 2017.
This August, New York-based blockchain infrastructure firm Elementus published research alleging that almost 50% of the total number of PlusToken withdrawals — an alleged crypto Ponzi scheme — were processed via the flagship Huobi platform.
Cointelegraph Japan presents a weekly digest of selected cryptocurrency- and blockchain-related news.
The cryptocurrency- and blockchain-friendly country of Japan has seen a number of significant developments for the industries this past week. A self-regulatory organization has introduced guidance for cryptocurrency custodians, while a subsidiary of major financial services firm SBI Holdings will conduct compliance policies using blockchain technology.
Here is the past week of crypto and blockchain news in review, as originally reported by Cointelegraph Japan.
Japan Cryptocurrency Business Association releases guidelines on custody
The Japan Cryptocurrency Business Association (JCBA) — a self-regulatory organization for the cryptocurrency industry in Japan — has released guidance for cryptocurrency custody operators.
The JCBA issued guidelines for crypto custodians ahead of the introduction of the Fund Settlement Act. The organization distinguished the various responsibilities of cryptocurrency custodians and suggested that there should be a difference in the range of virtual currencies that can be handled based on the differences in business characteristics in those assets.
Decentralized gaming platform releases Japanese-language version
The Sandbox, a decentralized gaming platform, launched a Japanese-language dashboard. The platform allows users to create and monetize characters as non-fungible tokens (NFTs).
Users use VoxEdit to create their own NFT assets and sell them on the marketplace for Sand tokens. Users can then create and host games and contests of various genres such as martial arts and racing.
SBI subsidiary establishes blockchain-based KYC and AML verification
SBI Security Solutions, a subsidiary of SBI Holdings, has established a new company that provides solutions for Know Your Customer (KYC) and Anti-Money Laundering (AML) processes with blockchain technology. The new company was formed in a partnership between the SBI subsidiary and international IT firm NEC.
The new company will be called “SBI Digitrust” and will be capitalized at 300 million yen ($2,766,000), 66% of which will be invested by SBI Security and 34% by NEC. SBI and NEC have jointly conducted pilots using blockchain technology and intend to combine SBI Security’s cybersecurity knowledge and NEC’s biometric authentication and AI technology.
Bitbank cryptocurrency exchange nets 30% share of the domestic market
Japanese cryptocurrency exchange Bitbank has released data showing that its average market share in domestic physical cryptocurrency trading volume is 30%. Citing data from the Japan Virtual Currency Exchange Association, Bitbank COO Hiroyuki Mihara wrote that Bitbank’s domestic spot trading share during this period averaged 30.2%.
While 30% may seem impressive for a single exchange in a crypto-friendly country like Japan, it represents a decline in market share for Bitbank. Mihara attributed the decline to the fact that several trading pairs for crypto and yen (JPY) are not available on the exchange, including Ether (ETH)/JPY, Litecoin (LTC)/JPY, and NEM (XEM)/JPY.
For the past decade, crypto has been associated with illegal activities, and politicians have stayed away. Is the perception now changing?
A Reuters report published on Oct. 8 claimed that Japan’s internal affairs and communications minister, Sanae Takaichi, confirmed to ministers in the country that crypto donations are not subject to financial regulations.
However, in the same announcement, Takaichi mentioned that donating cash or securities directly to a politician or a campaign is illegal. Only through technicalities in classification have crypto assets been able to fly under the radar of regulatory ordinance. As a result, politicians in Japan can receive individual crypto campaign funding without reporting the donations publicly.
Crypto regulation in Japan
Notably, Japan is one of the few countries to legally accept crypto. However, the country’s Political Funds Control Law, which controls crypto donations, doesn’t include crypto assets. There are two ways to look at this scenario.
The first way is through acknowledging that technology is outrunning regulators. Even though the Japanese Financial Services Agency proactively regulates crypto and has made it taxable for individuals, incorporating it in the entire constitution will take time — loopholes still exist and years of regulatory efforts are needed to cover all the gaps.
The second way is that laws governing individuals seem to pass with relative ease. Making cryptos taxable was advantageous for the government, resulting in the law being passed swiftly. However, legislation that gives politicians more power, like receiving unlimited anonymous funding through legal loopholes, will likely be overlooked for a long time. In an email to Cointelegraph, Alexey Ermakov, CEO and founder of financial services platform Aximetria, expands on this outlook:
“Governments and corporations around the world create and lobby artificial financial restrictions for people, in order to maintain full control over their money and make even more money on these restrictions, forcing people to use only those financial instruments that they can control, i.e. banks. The situation in Japan is just another instance to support this view.”
There are others who believe that documenting donations on blockchain could lead to an increased trust in the system. The transparency afforded by cryptocurrencies can make them beneficial to politicians, some of whom have struggled with them concerning financial contributions as well as the identities of their donors. Raising campaign funds with crypto would make their donors and donations a matter of public record.
Crypto donations for politicians in the U.S.
The United States Federal Election Commission has provided guidance on how politicians can receive Bitcoin (BTC) as a contribution. Unlike Japan, these donations have to be disclosed as donations. The trend of politicians embracing crypto donation began with Republican gubernatorial candidate Andrew Hemingway way back in 2014. The same year saw Dan Elder, who was running for the U.S. House of Representatives in the state of Missouri, becoming the first congressional candidate to fund his campaign solely with Bitcoin.
Kentucky Sen. Rand Paul became the first presidential candidate to accept Bitcoin for funding his 2016 campaign. Although Paul had expressed skepticism toward crypto, it was a logical political move considering the grassroots, libertarian support he fostered. In the 2020 election, after the decision by Rep. Eric Swalwell from Californian to withdraw from the presidential primary race, Andrew Yang is the only candidate that remains who accepts crypto donations.
The 27-year-old Agatha Bacelar, a Stanford engineer and designer running against Speaker of the House Nancy Pelosi, announced that she will be accepting cryptocurrency donations — including Bitcoin, Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC) and USD Coin (USDC) — through Coinbase to raise funds.
Numerous others in the U.S. have also made efforts to raise donations through crypto. Other countries have politicians raising funds through crypto too. For example, in Russia, opposition figurehead Alexey Navalny raised over $3 Million in Bitcoin donations.
Is it a marketing ploy?
Political fundraising through crypto could be used as a marketing tool more than a financial one. Candidates who accept crypto also do it to make a political statement. While Yang looked to strengthen his tech savvy image, Paul did so to gain more libertarian support. Talking about Yang accepting crypto, principal of Shipkevich PLLC and derivatives attorney Felix Shipkevich told Cointelegraph:
“This has been reported as a marketing ploy to appeal to a younger, more tech savvy audience. Yang’s acceptance of crypto could have positive side benefits however, including adding a layer of accountability around his donations as blockchain permanently records every transaction and the identity of the donor.”
A 2018 survey conducted by Clovr reported that 62% of eligible American voters believe that crypto donations could be used illegally in the U.S. political system — although the same poll showed that 60% want crypto political donations to be legal.
Some politicians like Hillary Clinton have rejected crypto donations in the past, for similar reasons that politicians accept cryptos. She was trying to appeal to the population that doesn’t trust crypto.
Crypto donations not restricted to political campaigns
Crowdfunding through crypto appeals to its inherently decentralized nature. The popularity of initial coin offerings and initial exchange offerings are a testament to it. And donations through crypto are gaining favorability, even in large organizations.
On Oct. 8, 2019, the United Nations Children’s Fund (UNICEF) launched a crypto fund. It announced that it will accept Bitcoin and Ether to support open-source technology benefiting children and young people around the world. Other prominent aid agencies that accept donations in digital assets are American Red Cross and the U.N. World Food Program.
The decentralized infrastructure provided by such crypto funds offers nonprofit organizations the advantage of bypassing expensive fees and middlemen traditionally required to move large amounts of cash overseas quickly. Additionally, tracking donations becomes easier and has the potential to allow donors to see how their money is used. On charities accepting cryptos, Ermakov said:
“In the context of donations, cryptocurrency plays, as a rule, a different function. Charitable foundations should regularly publish reports on their activities, indicating the sources of donations and how the money is being spent. Secondly, donating money to charitable organizations does not imply any kind of privilege neither political nor economic — this is very important.”
As global charities realize the benefits of donations through cryptocurrencies, the taboo associated around cryptos will likely diminish in the public’s eye. The software infrastructure around crypto also has to improve, and stories of hacks should be out of the news cycle to help with the perception. However, once adoption of cryptocurrencies spreads in the public domain, there is no doubt that politicians will start to look at raising funds through crypto.
Partnership between crypto exchange bitFlyer and tech services company Tpoint Japan allows local users to exchange loyalty points for Bitcoin.
Cryptocurrency exchange bitFlyer and technology services company Tpoint Japan announced a new partnership that allows local customers to exchange loyalty program points for Bitcoin (BTC) and earn rewards for paying in crypto. The official press release states:
“As part of our mission of ‘Making the world simpler with blockchain’, we will continue to contribute to the further development of a sound virtual currency industry. Tpoint Japan aims to turn their well-known points into ‘Points for people. Points for connecting people and society.’ Participating locations include Bic Camera, Yamada Denki, H.I.S., and more.”
Spend Bitcoin, get Bitcoin
As Cointelegraph Japan reported on Aug. 19, T-Card holders are now able to exchange every 100 T-Points for 85 JPY worth of BTC. At the same time, users will be rewarded for their purchases using Bitcoin in the amount of one T-Point per 500 JPY spent.
The two companies expect the new program will attract an additional two million customers.
Not so “mass” yet but adoption nonetheless
As Cointelegraph reported recently, cryptocurrency startup Pundi X announced that its point-of-sale payment gateway XPOS will soon be launched in Panama and its surrounding regions.
On Aug. 13, Canadian cryptocurrency exchange Coinsquare also announced that it will work with U.S.-based crypto payments startup Flexa to expand its in-store crypto payment processing services to Canada.
Rakuten, the “Amazon of Japan,” announced the launch of its new crypto exchange platform Monday, August 19, offering spot trading of crypto assets via a dedicated smartphone app. The e-commerce giant has been crypto-friendly for a while now, experimenting and investing in crypto payment systems since at least 2014, but with the launch of the wallet exchange service, Rakuten Bank users are now able to buy, sell, and exchange BTC, BCH, and ETH, as well as utilize fiat off-ramps to personal bank accounts. Other formidable forces in e-commerce are working hard to jump on board the crypto train as well.
“Rakuten” means “optimism” in Japanese, and with all the effort the e-commerce leader has been pouring into blockchain and crypto development over the past years, that positive moniker makes sense. With a market cap of $14.5 billion, over 17,000 employees worldwide, and $10 billion in sales as of May, Japan’s internet commerce behemoth is ubiquitous in the land of the rising sun, and elsewhere.
In a press release from Tokyo yesterday, Rakuten Wallet Inc., a subsidiary of Rakuten Group, announced the start of its long-awaited crypto trading app and exchange service:
Through the smartphone app, customers can make transactions for crypto asset trading accounts, such as depositing/withdrawing Japanese yen and depositing/withdrawing crypto assets, 24 hours a day, 365 days a year…Three types of crypto assets can be traded: Bitcoin (BTC), Ethereum (ETH), and Bitcoin Cash (BCH).
The app features a multisig-based “cold wallet” for user funds, and “There are no fees for opening or managing an account, purchasing or selling crypto assets, or depositing money,” according to the press release. While the company uses the term “cold” in describing the wallet, it is important to note that the actual meaning here is simply offline storage, and as such security is not solely in the hands of the account holder.
Application Process: Convenience In, Privacy Out
For those applying for a Rakuten Wallet account, the process is pretty straightforward. “Customers who already have a bank account with Rakuten Bank will be able to easily open a Rakuten Wallet account simply by entering the required information on the online application form,” the press release confirms.
However, privacy-minded crypto users may find the application off-putting. Japan is arguably the world leader in crypto regulation and adoption, with rigorous KYC and AML protocols implemented industry-wide thanks to Japan’s FSA (Financial Services Agency). The veritable dating game-style personal quiz prior to signing up is reflective of this reality.
Applicants must answer several questions even after opening a Rakuten Bank account including private details relating to one’s job, purpose for opening the account, and income. They must also state how many years they have been active in the crypto space. This is in stark contrast to private, P2P exchanges like local.bitcoin.com, where the only thing needed is an email address.
Rakuten’s Push Echoed by Amazon, Others
Establishing the Rakuten Blockchain Lab in 2016 after an earlier investment in Bitnet, a wallet/payments software firm in 2014, Rakuten is no stranger to crypto. In terms of the breakneck speed proliferation of Japanese regulations and crypto adoption, 2014 seems like light years ago to most. The Tokyo-based company is not alone, though, with other movers and shakers in the industry having also been putting in the time and research, and now seem to be making plans to jump on board with similar projects.
An official patent document from May reveals that Amazon is researching Merkle Tree solutions to proof-of-work challenges for unknown applications. Though Amazon does not directly accept crypto payments like Rakuten’s American site does, via the integration of the Bitnet portal, similar developments may soon be in the works for America’s retail juggernaut. Already the Amazon Coin digital currency is a reality.
Rakuten’s CEO, Hiroshi Mikitani, announced in early 2018 that the company was working on its own crypto token, “Rakuten Coin” to be integrated with the extremely popular Rakuten points system in Japan. Currently these points can be exchanged for bitcoin via the Japanese site.
Amazon has further created a stir in the media in past years by buying up crypto-related domain names such as amazoncryptocurrency.com, amazoncryptocurrencies.com, and amazonethereum.com. While this could be simple brand protection, based on the company’s recent research and investments, real speculation does seem warranted. Especially considering that other companies on similarly herculean tiers of mega financial success like Walmart, Facebook, and Google are all investigating and experimenting with blockchain and crypto as well.
Japan Still Skeptical of Exchanges
Though the Rakuten announcement is big news for crypto enthusiasts in Japan, some remain skeptical. With massive losses of funds at Mt. Gox, Coincheck, and most recently Bitpoint, customer confidence in Japan-based exchange services has suffered. Even lesser known issues relating to regulatory changes have left a sour taste in the mouth of many. Tokyo-based exchange Bitflyer, for example, froze user accounts in 2018 with no clear notification, citing “general maintenance” and the need to comply with official regulatory audits. Some users had crypto frozen on the exchange for weeks, with little to no assistance from customer service.
Rakuten’s Positive Push
Japan’s troubles of the past notwithstanding, Rakuten Wallet is pushing forward, with its Android app already available and an iOS implementation expected sometime in September. The service is set to be available 24-7, 365 days a year, except for maintenance periods. Fees only apply for withdrawals of Japanese yen and crypto assets. According to the press release “The app also features many useful functions that allow customers to effectively manage their crypto assets, such as confirmation of assets deposited in Rakuten Wallet, the purchase and sale of crypto assets, and real-time chart rate confirmation.”
The optimistic foray into crypto is perhaps to be expected from the group that is already an online mall, credit card company, Japan’s largest online bank, and owns an actual baseball team. With Rakuten riding the crypto wave in the East, and spreading integration worldwide, it can’t be too long until other giants follow suit.
What are your thoughts on Rakuten’s announcement? Let us know in the comments section below.
Three cryptocurrencies are now available for spot trading, with a smartphone app set to follow.
Japanese cryptocurrency exchange Rakuten Wallet has launched trading a year after acquiring Everybody’s Bitcoin.
Three trading pairs go live
Confirmed in a press release on Aug. 19, Rakuten Wallet, which is a subsidiary of Japanese e-commerce giant Rakuten, said spot trading of three cryptocurrencies — Bitcoin (BTC), Ethereum (ETH) and Bitcoin Cash (BCH) — was now live.
In future, developers plan to release an app for iOS and Android, use of which will be mandatory for deposits and withdrawals.
“Customers who already have a bank account with Rakuten Bank will be able to easily open a Rakuten Wallet account simply by entering the required information on the online application form,” the press release added.
Rakuten acquired Everybody’s Bitcoin in August 2018 for a sum of $2.4 million. Executives had originally announced the impending launch in April this year, but progress appeared to stall.
Japan’s cryptocurrency ecosystem growing rapidly
The exchange joins a rapidly expanding ecosystem on the Japanese market, with multiple competitors vying for a slice of the domestic cryptocurrency trade.
Last month, Tokyo announced it wished to create a cryptocurrency-based analog to SWIFT, the global payment settlement network, in a move subsequently approved by the G7.
Monex Group, the online broker which bought out another Japanese exchange, the embattled Coincheck, last year, also recently signalled its desire to join Facebook’s Libra digital currency network.