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Less than a year after raising ¥3 billion ($27 million) in a record funding round by a bitcoin and Fintech company in Japan, Tokyo-based bitFlyer now sees all three of Japan’s ‘mega-banks’ as investors in the bitcoin exchange.
In an announcement today, bitFlyer, Japan’s largest bitcoin exchange and blockchain services company, revealed fresh funding from Mizuho Capital and SMBC Venture Capital, both of which are the investment arms of the Mizuho Banking Corporation and the Sumitomo Mitsui Banking Corporation respectively. The two banking corporations join Mitsubishi UFJ as investors in bitFlyer. Mitsubishi UFJ Capital participated in a ¥510 million ($4.5 million) round of funding in August 2015.
Altogether, all three of Japan’s megabanks have now invested in the country’s leading bitcoin exchange.
Interest in Bitcoin Grows
Investments and interest in Japan’s burgeoning bitcoin industry have quickly gathered pace in the lead-up to new regulations to be put into effect in June this year.
In March last year, the Japanese cabinet recognized virtual currencies like bitcoin to have the same properties as money as a means of payment and settlement. The Japanese legislature passed the bill to regulate virtual currency exchanges in mid-2016.
In a recent email to CCN, CoinCheck’s business development chief Kagayaki Kawabata credits Japan’s regulatory moves for bitcoin’s booming popularity in the country.
With the upcoming regulations, norms that were encouraged by the local bitcoin industry, 2017 is deemed as “the first year for virtual currency” by bitFlyer. ResuPress, the operator of Japanese bitcoin exchange CoinCheck predicts a frenzied growth in bitcoin adoption by storefronts and merchants across the country. By the end of 2016, there were over 4,200 bitcoin-accepting merchants, more than quadrupling the total from 2015. That trend is expected to continue into 2017, with ResuPress estimating that number to quintuple to 20,000 merchants this year.
In January 2017, bitFlyer laid claim to being the largest bitcoin exchange in the world by volume. The company revealed trading volumes exceeding ¥320 billion ($2.81 billion) with over 400,000 users in the first month of the year.
Bitcoin Company Delivers Technology to Japan’s Biggest Banks
The three megabanks had previously partnered bitFlyer in 2016 to test domestic money transfers over a blockchain, with technology provided by the bitcoin company. The proof-of-concept experiment ran for nine months through September 2016 and clocked 1,500 transactions per second on the blockchain, beating the peak speeds of the existing interbank wire system.
The PoC experiment used bitFlyer’s proprietary blockchain which the exchange refers to as “miyabi.”
Images from Shutterstock.