Jul 16 (News On Japan) - In 2024 Japan's market, for currencies is set to experience growth with an estimated 500,000 active cryptocurrency traders by the year's end.
This noteworthy surge underscores the increasing fascination and acceptance of assets by both investors and consumers in Japan.
The country's forward-thinking and hands-on stance on regulating cryptocurrencies has played a role in driving the industry’s expansion. The regulations have fostered innovation, protected investors, and allowed the widespread adoption of cryptocurrencies as a legitimate asset class.
Japan is seeing a rise in the adoption of cryptocurrencies and NFTs in the online shopping and proxy services market and blockchain gaming sector including Japanese casinos. According to regulatory technology platform Vixio, Japan’s online casino market has experienced remarkable growth, with online gambling platforms surging to 3 million hits per day. Factors like the increased adoption of cryptocurrencies, game variety, access to mobile gaming, and the country’s progressive regulatory approach towards crypto have all been instrumental in driving the growth of the online casino market in Japan.
Driving Factors for Japan's Crypto Success
Several key factors are fueling the rapid expansion of Japan's crypto market in 2024:
Progressive Regulations
Japan has established itself as a leader in cryptocurrency regulation, providing a secure and transparent environment for traders and investors. The introduction of new compliance-focused rules, along with the launch of crypto ETFs in the US, is expected to further boost Japan's crypto market by increasing involvement from both institutional and retail investors.
Preference for Established Crypto
Japanese crypto enthusiasts are showing a strong preference for large, well-known cryptocurrencies like Bitcoin and Ethereum that have been approved by the country's Financial Services Agency (FSA). This focus on lower-risk, established tokens is likely due to regulations limiting influence on riskier crypto products.
Growing Adoption and Innovation
Japan is seeing increased involvement in local blockchain projects, particularly in the gaming industry, as well as rising interest in NFTs and other blockchain-based platforms. Japan has positioned itself as a global leader in blockchain gaming and the broader Web3 space, with strong government support and the involvement of major industry players. This has led to the development of innovative local projects across online gambling, art, and other sectors.
Japan's Crypto Trading Population to Reach 500,000
The estimated increase in Japan's crypto traders is expected to increase from 350,000 to approximately 500,000 by the end of 2024. This places Japan's crypto trading population between the sizes of Turkey and Indonesia and about two-thirds the size of South Korea's market.
The increasing familiarity and understanding of crypto within the country alongside the introduction of easy-to-use trading platforms and mobile apps, have boosted the interest in cryptocurrency trading options. Investors are recognizing the potential of digital assets as an alternative investment class and a hedge against inflation.
Regulatory Landscape and Industry Associations
Japan's regulatory environment has been very favorable for the cryptocurrency industry. The Payment Services Act categorized cryptocurrencies as crypto assets, making them legal tender in the country. This legislation does not restrict ownership and investment in crypto-assets, but the government has implemented robust measures to protect consumers and prevent criminal activities.
In addition to the FSA, several industry associations play a crucial role in shaping Japan's crypto landscape, including:
- Japan Virtual Currency Exchange Association
- Japan Security Token Offering Association
- Japan's Crypto Association
- Asia Web3 Alliance Japan
These organizations collaborate to set industry standards and best practices to ensure the responsible development of the crypto ecosystem.
Institutional Investment and Partnerships
The Japanese financial sector has been closely monitoring the crypto market, with major regulatory bodies driving responsible adoption. In 2024, significant developments include the partnership between Circle and Coincheck to expand access to USD Coin in Japan, and the joint venture between Komainu (backed by Nomura) and Crypto Garage to implement resilient infrastructure for institutional participation.
A policy change in September 2023 allowed startups to issue funds with digital assets instead of traditional stock through venture capital firms, further boosting blockchain businesses in Japan. The country is solidifying its position as a global leader in the cryptocurrency industry.
