China and other parts of the world are trying to ban cryptocurrency, Japan is working on adopting it.
China wants to keep Bitcoin out, Japan wants to become the cryptocurrency capital of the world.
One is operating from a place of fear while the other is operating from a place of opportunity.
One is fighting a losing battle with technology and innovation and the other is embracing technology and a new way of living.
Japan made Bitcoin official legal tender back in April of this year and hasn't looked back since.
As of early this morning, regulators announced that they have issued operating licenses to 11 exchanges already.
That's great, but what does it mean?
Basically this is just an enforcement of a section of the law that was part of the payment services law which mandated all cryptocurrency exchanges register with authorities by the end of September.
This was part of the law that established Bitcoin as a legal form of payment.
So far, 11 licenses have been issued to exchanges, 17 applications for licenses are still in the review phase, and 12 exchanges have closed their doors for failure to meet the mandated requirements.
What does it do?
The licensing will enforce operational requirements for the exchanges.
These were needed to better regulate Bitcoin in order to make it a trusted source of payment and to better protect customers from potential pitfalls.
Specifically these requirements include:
- High standards for cyber-security.
- The segregation of customer accounts.
- The verification of customer identities.
Among other things.
This is good news!
At some point, these things need to be regulated in order to reach mass adoption. Anyone believing otherwise is most likely delusional.
Only being used on the dark market was never going to get Bitcoin to $100k per coin.
The cryptocurrency exchange Quoine, which was also one of the 11 to receive a license, would agree with me:
"We will work alongside regulators towards the healthy development of the cryptocurrency industry within Japan and on a global scale."
The regulators from Japan went on to say that they would be working with exchanges to foster sound market development.
Do you hear that China?
Japan has decided to work WITH exchanges in order to make these things function in the best interest of everyone involved.
Japan has been fairly unique and proactive in their cryptocurrency regulations.
Where the rest of the world is seeing caution signs, Japan is seeing a wonderful opportunity.
Many of these regulations on the exchanges stem from what happened back in 2014 with Mt. Gox. Where investors/customers lost hundreds of millions of dollars worth of cryptocurrency, when the largest exchange at that time, collapsed.
This seems like a much more logical approach to cryptocurrency as opposed to outright banning them. We will see which route other countries decide to go in the coming weeks and months.
Stay informed my friends.
Follow me: @jrcornel