Binance, the world’s largest and most recognized cryptocurrency exchange, entered the Japanese market by buying the regulated Sakura Exchange Bitcoin Co., Ltd. (SEBC). SEBC, a Japan Financial Service Agency (JFSA) regulated company, is now 100% owned by Binance
The acquisition, which was a first in East Asia, was announced on Nov 30 by Binance. This adds to the company’s long list of approval from different jurisdictions which include Abu Dhabi, Bahrain, Cyprus, Dubai, France, Italy, Kazakhstan, New Zealand, and Poland.
Binance Japan’s general manager Takeshi Chino said: “The Japanese market will play a key role in the future of cryptocurrency adoption. As one of the world’s leading economies with a highly-developed tech ecosystem, it’s already poised for strong blockchain uptake. We will actively work with regulators to develop our combined exchange in a compliant way for local users. We are eager to help Japan take a leading role in crypto.”
SEBC’s CEO Hitomi Yamamoto said that his company’s priority is consumer protection and Binance’s entry into Japan will contribute to building a regulatory-compliant atmosphere for Japanese users. Binance will also help users to have access to crypto services that are needed for mass adoption.
Binance CEO, Changpeng Zhao (CZ) also tweeted the deal and noted that his company is committed to regulatory compliance.
Sakura Exchange Bitcoin was founded in 2017 and is headquartered in Tokyo. It has a declared capital of 1.2 billion Yen or about $10 million.
Binance entering Japan is Bullish
Japan is a country of innovation. Aside from Portable music players, high-speed trains, and Quartz watches, the first futures exchange market was created in the country. The Dojima Rice Exchange was started in 1730, years ahead of the New York Stock Exchange. The rice exchange is considered to be the forerunner of modern futures exchanges around the world.
The East Asian country is also an economic powerhouse. Its Gross Domestic Product (GDP) is $4.3 trillion, the 3rd largest in the world. As of July 2022, internet usage penetration is at 94%. These two factors combined make Binance’s purchase of SEBC a good decision. A rich and tech-savvy population will greatly contribute to crypto adoption.
Japan is also in the process of slowly loosening up regulations surrounding the crypto space. There is a plan to make it easier to list new tokens, by shortening the waiting period to around 14 days. The government is also looking at giving tax breaks to entice crypto startups to stay in the country. The decision made by Binance might have been influenced by these new measures.
Regulation and Adoption
Compliance is one of the words repeatedly seen in the announcement of Binance, Sakura Exchange Bitcoin, and CZ. Regulations and Compliance are probably the most debated topics in the crypto space. Some parties are asking for regulations due to the recent bankruptcies of crypto companies. Some are vehemently against it because it is seen as a hindrance to adoption.
Rules and Regulations don’t have to be a zero-sum game. It can be crafted in a way that all stakeholders will benefit from its implementation. Japan saw that they needed to change their taxation to prevent crypto startups from leaving. Multiple regulations are also being reviewed so that the country will not lag in digital asset adoption.
Japanese culture is known for its law-abiding nature. For the country to fully embrace crypto is a big win for the industry. Maybe in the future, their government’s flexibility can be seen as a model for others.
Binance’s presence in Japan should be seen as a positive development for the crypto space. Countries are slowly realizing that blockchain is the future. Either they adopt it early or be left behind.