Japan’s Regulatory Framework for Cryptocurrencies
A recent research paper by Burina Fujiwara, an economist at the City University of Hong Kong, highlights Japan’s robust regulatory framework for cryptocurrencies. Governed by the Payment Services Act (PSA) and the Financial Instruments and Exchange Act (FIEA), Japan has become a significant player in the global cryptocurrency market.
XRP’s Unique Position in Japan
Fujiwara’s research emphasizes that while Bitcoin receives most of the attention, XRP holds a distinct position in Japan’s cryptocurrency market. Unlike other cryptocurrencies, XRP serves as an intermediary mechanism for exchanging different currencies or networks.
XRP’s Impressive Trading Volume
In February 2022, XRP had a remarkable trading volume in Japan, with nearly 1.36 billion units traded. This surpassed Bitcoin, which had a trading volume of about 180 thousand units during the same month. Fujiwara attributes this success to XRP’s strong partnership with Japanese financial giant SBI Holdings.
The SBI Holdings and Ripple Partnership
The partnership between SBI Holdings and Ripple has instilled confidence among Japanese investors, leading to significant trading activity in XRP. SBI Holdings’ investment of close to 300 million in Ripple in 2017 greatly contributed to XRP’s market presence in Japan.
Competition Between Bitcoin and XRP
Surveys indicate a close competition between Bitcoin and XRP among Japanese traders. A Twitter survey by BITMAX showed that 25% of respondents favored XRP, while 26% favored Bitcoin. However, these findings are not conclusive due to the small sample size.
XRP’s Rank in Digital Asset Holdings
The Japan Virtual Currency Exchange Association (JVCEA) report reveals that XRP ranks second in yen-denominated digital asset holdings in Japan, just behind Bitcoin.
Hot Take: XRP’s Dominance in Japan’s Cryptocurrency Market
Japan’s regulatory framework, XRP’s unique position as an intermediary cryptocurrency, and its strong partnership with SBI Holdings have made it a dominant player in Japan’s cryptocurrency market. With impressive trading volume and a significant rank in digital asset holdings, XRP continues to attract Japanese investors. While competition with Bitcoin remains close, XRP’s market presence and trading activity highlight its prominence in the country.
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