Japan and blockchain tech are a match made in heaven

Tatsuto Fujii, principal analyst at Mitsubishi UFJ Financial Group (L), Yuzo Kano, CEO at bitFlyer (M), and Mio Takaoka, partner at Arbor Ventures (R) on stage at Tech in Asia Tokyo 2017. Photo credit: Michael Holmes Photo / Tech in Asia.

Blockchain is about a whole lot more than cryptocurrencies. But it was inevitable that digital tokens would dominate a discussion at Tech in Asia Tokyo 2017 on the impact that blockchain tech is having on Japan’s financial services industry.

It makes sense. While blockchain is seen to have significant potential applications across a wide variety of contexts – and not just within finance – bitcoin and other cryptocurrencies have been the most tangible encounter with the technology for most people.

And Japan is one country that has shown particular enthusiasm for this new paradigm. The government in Tokyo passed a law recognizing bitcoin as legal tender back in April; while just last week, regulators in the country endorsed 11 companies to operate cryptocurrency exchanges.

Speaking on stage at Tech in Asia Tokyo 2017, Mio Takaoka, partner at Hong Kong-based VC firm Arbor Ventures, pointed out that the volume of bitcoin being exchanged with Japanese yen has skyrocketed in recent months – presumably as a result of this high-level acceptance, in part at least. This trend is highlighted by research from Coindesk, indicating that Japanese buyers are becoming increasingly active on the cryptocurrency markets.

Worldwide bitcoin trading volume, January 2011-January 2017. Image credit: ‘State of Blockchain – Q2 2017,’ Coindesk.

Worldwide bitcoin trading volume, February-July 2017. Image credit: ‘State of Blockchain – Q2 2017,’ Coindesk.

More than money

Joining Takaoka on stage, Tatsuto Fujii, principal analyst at Mitsubishi UFJ Financial Group, suggested the broader potential of cryptocurrencies and the blockchain tech that underpins them could serve to boost Japan’s economy. In fact, the country’s financial services industry is trying to shift terminology in order to encourage greater adoption.

“Rather than calling it ‘cryptocurrency,’ we call it ‘digital currency,’” he explained. “We think that can open up a door to new ways of thinking about payments, and additional ways to use these digital coins.”

Tatsuto Fujii, principal analyst at Mitsubishi UFJ Financial Group, on stage at Tech in Asia Tokyo 2017. Photo credit: Michael Holmes Photo / Tech in Asia.

The ‘B’-word