Has Japan Adopted Cryptocurrency the Same Way as the West?
Asia and Japan in-particular, has been one of the frontrunners in the adoption of cryptocurrency. This should not come as a surprise because Japan is usually leading the way when it comes to welcoming innovative technology and ideas. Asian countries, such as Japan, have pushed the boundaries of technology and there are museums in Tokyo where you can see the technology of the future, including robots. The adoption of crypto in Japan has been widespread in certain age groups but how does it compare to the west?
To generate new cryptocurrency, a process called mining is required. This process requires a lot of energy and therefore, it makes sense for the most crypto to be mined where energy costs are low. When discussing crypto in the west, we must start with the United States. This is where much of the world’s bitcoin is mined and if we take figures from April 2021, the US had a global hash rate of 16.85%. However, this increased as the year progressed and a few months later, that figure was at 35.4%. In terms of specific states, Texas is leading the way in terms of crypto mining and could become known as the bitcoin capital of the world. In contrast, Japan is outside the top 8 countries for mining bitcoin, with China, Kazakhstan, Russia, Canada, Iran, Malaysia, Germany, and Ireland all above Japan when it comes to mining bitcoin. So, in the respect of mining, Japan has not adopted crypto the same as the west, with the United States, Canada, Germany, and Ireland leading the way.
When discussing the adoption of cryptocurrency by Japan, we must consider the crypto legislation in the country. Crypto exchange businesses in Japan are regulated by the Payment Services Act and have been since April 2017. In 2014, the Japanese government decided not to introduce laws to prohibit individuals or companies from receiving bitcoin as a form of payment. All cryptocurrency exchange businesses must be registered and keep records and transactions must comply with money laundering. Looking at the west and particularly the United States, bitcoin was classified as a convertible decentralized virtual currency in 2013 by the U.S. Treasury and is legal in the country. So, cryptocurrency is legal in Japan and the major western nations, including the United States, Canada, Germany, Spain, and the United Kingdom.
Public Interest in Crypto
Japan’s cryptocurrency market grew significantly in 2021 and between the end of 2020 and 2021, the amount of crypto being traded in the country increased by six times. As of the beginning of 2022, over 6 million people in Japan were using crypto but it seems the government is keen to keep the industry under control. In terms of population percentage, roughly 5% of the Japanese people are using crypto. Switching to the west and in the United States, between 30 to 50 million US citizens have engaged with crypto and that figure is predicted to keep rising. That means around 14% of the population are using or have used crypto. This number is bigger than Japan but access to crypto has been a lot easier for US citizens over the years. If we look at the United Kingdom, roughly 1 million people claim to own a crypto asset. That means just under 2% of the population have used crypto, which is less than Japan. Perhaps Japan’s high interest in gaming has helped, with crypto gaming becoming more popular since 2018. There are plenty of high quality crypto casinos in Japan and new gaming cryptocurrencies have been issued, with Enjin being a good example.
Japan is home to many established companies and start-ups who are entering the crypto market. Japan may not mine as many bitcoins or have the same legislation as countries in the west but the country is adopting cryptocurrency quickly. The number of individuals and companies entering the crypto market in Japan is only going to increase in the future.