A beacon of hope has emerged for bitcoin just in time for spring — and it’s brought up prices with it.
While the world’s most popular cryptocurrency recently suffered some defeats in the U.S. at the hands of the Securities and Exchange Commission (SEC), bringing prices down below $1,000 for the first time in months, not all news has been bad news.
In a major move toward bitcoin legitimacy, Japan recognized bitcoin as a legal payment method on April 1. (And no, it wasn’t an April Fool’s joke.)
In the days following the news, bitcoin rose over 25 percent from its period low around $935 in the last week of March amid hard fork fears and the SEC letdown. At the time of writing, one bitcoin was worth $1,176.70, up $42.82 from the start of Thursday trading and trending upward still. Bitcoin’s market cap sat at just over $19.1 billion.
As part of the new law that has “legalized” bitcoin in Japan, the nation’s Financial Services Agency has put capital requirements, along with cybersecurity and operational stipulations, in place for bitcoin exchange. Additionally, bitcoin exchanges in Japan will now be required to conduct employee training programs and submit to annual audits.
It’s a bummer for users who’d like to keep regulatory bodies out of their extranational crypto-stashes, but a bonus for other users who favor the potential for stability government management could provide their investments.
Already, retailers in Japan are boarding the bitcoin train. Japanese bitcoin payment processor and marketplace bitFlyer has reportedly partnered with a Japanese electronics retailer, said CoinDesk, to begin testing out a new bitcoin-enabled point-of-sale (POS) system.
Consumer electronics retailer Bic Camera will integrate bitFlyer’s POS to enable customers to pay for purchases with bitcoin for transactions under ¥100,000 ($901.75). CoinDesk noted that the bitcoin payments will be converted to yen, with Bic Camera being charged a 1 percent service fee on transactions.
As with other bitcoin payment processors, the POS system developed by bitFlyer will allow the store to accept the digital currency and immediately convert funds to yen. The stores are then charged a 1 percent service fee per transaction.
Around the same time, Japanese bitcoin wallet and exchange Coincheck announced a partnership with Recruit Lifestyle, the retail unit of Japanese conglomerate Recruit Holdings, that could put its bitcoin-enabled POS system in up to 260,000 physical stores by this summer.
It will be interesting to see if consumers bite. Japan as a nation has been slow to embrace digital and mobile payment methods, though the tide seems to be turning toward adoption growth as of late, especially as the country continues to feel the burden of its cash problem.
The move to enabling bitcoin transactions in stores could also benefit crypto-minded tourists. Since projections indicate that Japan could see 20 million annual foreign tourists by 2020, there may be more than a few coming soon who are ready to pay with bitcoin.
The government of Japan’s move to legalize bitcoin as a payment method and regulate it as such could set a precedent internationally among nations looking to work digital currency regulation into their respective legal and financial systems.
Switzerland has become a highly bitcoin-friendly nation as of late with Finma’s plans to clarify regulation, the nation’s railway ticketing systems’ recent adoption of bitcoin ATM functionality, etc. Additionally, the government of Australia set out to create accounting standards for bitcoin in November of last year.
Stateside, times are still tough for bitcoin legitimacy — at least for the time being. The SEC still sits on one remaining bitcoin ETF proposal, though with the outcomes for the prior two in mind, things look grim for the viability of Grayscale Investments LLC’s Bitcoin Investment Trust.
But if consumers pull out their bitcoin wallets at major retailers across Japan, other nations could soon look to follow suit.