Japan is in love with bitcoin. Period. On April 1, the country began recognizing bitcoin as a legal payment method, but not as a currency – more like prepaid cards and gift certificates. This news was huge for crypto market and it led two major Japanese retailers; Bic Camera and Recruit Lifestyle to partner with local bitcoin exchanges to start accepting bitcoin as payments.
Electronic money has been quite popular in Japan for a while now. Some of the most popular electronic payment methods are Suica and Rakuten’s Edy, which are rechargeable contactless smart cards. While Suica is accepted at about 380,000 outlets and used as a fare card on train lines in Japan, Edy can be used at 470,000 locations nationwide.
This just goes to show possibilities for bitcoin in Japan are endless. According to a report by Coincheck, bitcoin will be accepted at 260,000 shops by this summer in Japan. While more and more Japanese are using bitcoin than expected, thousands of merchants have already applied to accept bitcoin payments.
BITPoint Japan, the company behind Peach Aviation’s move to let travelers use bitcoin to pay for tickets, is planning to give hundreds of thousands of retail outlets the ability to accept the digital currency.
Possible bitcoin split?
The debate on whether or not to increase the block size has been going on for a couple of years. Disagreement is between the core developers and the miners on how to best scale blockchain. The idea is to solve the transaction fees dilemma, which are quite high right now.
As of now, Bitcoin network can only achieve 7 transactions per second. To put this in context, Visa says its payment system processes 2,000 transactions per second on average and can handle up to 56,000 transactions per second if needed.
The average time it takes for a bitcoin transaction to be verified is around 50 minutes, but some transactions can even take days. If you add a small fee to your transaction, it bumps that transaction up in the queue, meaning that those who didn’t pay such a fee – may have to wait more.
On August 1 the fate of bitcoin will be decided. In a nutshell, the bitcoin nodes will try to force the miners to implement a protocol upgrade proposal called BIP148.
Even though there has been a lot of politics surrounding bitcoin regarding hard fork and the possibility of splitting the currency into two, Japan doesn’t seem to be bothered by all that. The country looks forward to standardizing the implementation of blockchain technology across the country’s banking sector.
That sweet premium and more adoption
Last week bitcoin price surged to a record high at $3,000 a piece. Due to high demand, in many countries users were having to pay a premium on the price of up to $600-$800. Japan was one of those countries, but the price seems to be settling now.
These premiums did not dematerialize overnight. It began with the stabilization of the Chinese market and the resumption of withdrawals led by the big three Bitcoin exchanges in China – Huobi, OKCoin and BTCC.
To give you some perspective, bitcoin price in South Korea surpassed $4,500 while global average price barely reached $2,600. It was the recovery of Chinese market that acted as a catalyst for global Bitcoin exchange market stabilization and standardization.
The premiums have only resulted in more adoption of the crypto currency. Whether it be Japan, South Korea or India, increasing number of people are joining the crypto bandwagon.
Japan looks to be the first country embracing bitcoin and set an example for others. Bitcoin trading in Japanese yen is the second most liquid market globally. Late last year, Japanese officials took the formal decision to end the 8% consumption tax rate imposed on bitcoin buying through digital currency exchanges.
Every country gives importance to the tourist money that comes in. Japan is no exception. So much so that in recent years, Japanese merchants have started attracting Chinese tourists by accepting China UnionPay.
It is likely that Bitcoin, which is used by a lot of foreign tourists will also lead to a further boost in tourist spending in Japan. As 2020 Olympics inch closer, Japan wants to leave no stone unturned to represent itself as a bitcoin friendly nation.
This is a guest post wrote by Anupam Varshney is a cryptography enthusiast and an amateur traveller. In his pursuit to educate more people about bitcoin and other cryptocurrencies he runs a bitcoin meetup and writes at Bitcoinprice. He also writes about content marketing, branding and SEO. When he is not busy analysing crypto trends, he likes to play chess and wonder why more nations don’t play cricket.