Japan’s digital money market is thriving, thanks to improved public trust in virtual currencies like bitcoin.
A total of JPY430 billion (USD4.29 billion) worth of bitcoins were traded in the first half of 2016—about 50 times more than the trading volume in the same period last year, according to figures obtained by Nikkei Asian Review.
“Since this spring, the trading volume has been growing at a pace that we have never seen before,” Yuzo Kano, chief executive of bitFlyer, told the news outlet.
bitFlyer, which handles about 40 percent of bitcoin trading in Japan, has seen its customer base rise tenfold from a year ago. The bitcoin exchange said it has already surpassed 200,000 customers for August alone.
One contributing factor to the booming digital currency market is the legislation that was passed in May, which required bitcoin exchanges to register with the government’s Financial Services Agency (FSA). The new law defines virtual currencies as “asset-like values,” allowing digital money to be used not only to buy goods and services but also as an alternative for legal tender through purchases and trades.
The law has boosted public trust in cryptocurrency, whose image was tarnished following the 2014 collapse of now infamous Mt. Gox exchange and the subsequent arrest of its CEO, Mark Karpeles. Now, FSA has been given the mandate to conduct on-site inspections and require operators to follow know-your-customer practices.
Aside from the stable digital currency market in Japan, bitcoin’s volatility in the Asian country has also proven irresistible for digital money speculators. When 2016 began, one bitcoin was worth less than JPY44,000 (USD439.42). The price smashed the JPY80,000 (USD798.94) ceiling in June before settling in at its current JPY60,000 (USD599.20) trading price.
Current bitcoin price and trade volume
The price of the popular digital currency dropped again to $571.90 on Thursday with a market cap of $9.11 billion and trade volume of $20.63 million.