Rakuten sets up blockchain research lab

Via TechCrunch:

Rakuten has confirmed that it has acquired the assets of Bitnet, a bitcoin wallet startup it invested in, which will be used to create a ‘bitcoin lab’ for the Japanese retail giant.

The transaction is undisclosed but it follows a Wall Street Journal report in July which speculated that a deal was in the works. Rakuten took part in a $14.5 million investment round for Bitnet nearly two years ago, which was led by Highland Capital Partners.

Rakuten has had an interest in virtual currencies and online payments for years now. In 2002 it launched MailMoney, which let users transfer money with only an email address. In 2014 it started a similar service through Facebook, and in 2015 it began accepting bitcoin as payment.

Rakuten also has an electronic currency, Edy, which fits in with its extensive customer reward point system. The more customers make purchases in the Rakuten platform, the more points are saved which through Edy could be used to make non-Rakuten purchases.

Rakuten exploring blockchain makes sense because a new point system based off the technology would cost significantly less. Rakuten could also effectively issue its own currency through blockchain and control all parts of a transaction. Then it could offer higher interest rates than traditional banks to keep even more customers in its ecosystem.

Although Rakuten is expanding its financial services, blockchain would also work in other parts of its business like security and automation for insurance policies.