A year ago, China accounted for 90 percent of all bitcoin trade. But since Beijing banned initial coin offerings (ICOs) and regulators started to crackdown on bitcoin exchanges in September, another Asian powerhouse has swooped in to embrace the crypto movement.
Japan recognized bitcoin as a legal form of payment earlier this year, and bitcoin trade in the country now accounts for about half the volume of global trade, compared with about a quarter in the U.S.
Now big retailers are joining the movement, as the cryptocurrency’s legalization has encouraged them to partner with bitcoin exchanges and begin accepting the digital currency as payment.
There’s already more than 4,500 stores in Japan that let you pay with bitcoin, and the Nikkei says that number could increase fivefold by the end of the year.
Mai Fujimoto, known as Miss Bitcoin in Japan, has become a type of “crypto evangelist,” blogging and tweeting about all things bitcoin.
She said that although regulations built trust in the currency, bitcoin won’t be replacing cash anytime soon, as it’s still considered an investment rather than an everyday currency in Japan.
“Many people have bought bitcoin now and maybe we need time to use bitcoin and learn about it,” she told CNBC.
But bitcoin’s popular rise in Japan hasn’t been without its problems.
Three years ago, the Japanese-based bitcoin exchange Mt. Gox collapsed and declared bankruptcy after hackers raided its accounts.
So now regulators are responding with stricter rules, requiring cryptocurrency exchange to maintain minimum capital reserves, separate customer accounts, and establish anti-money laundering practices.
For bar owner Mike Verweyst, who processes bitcoin payments every day in Japan, the new regulations don’t seem to be pushing people away from using the digital currency.
“It’s kind of surprising. Japan doesn’t really seem to be the first to adapt to new concepts like this. In fact they kind of shy away from change mostly,” he said.
“But maybe they’re going to grab it and run with it, I hope.”