Binance Endeavors to Enter the Japanese Market by Creating a New Trading Platform

Binance, the biggest and most prestigious cryptocurrency exchange, is quite challenged in complying with every country’s terms on cryptocurrency. In most areas, you can buy Bitcoin on Binance and use the exchange for other transactions, but not all countries share the same view as the company. For example, due to regulatory differences, Binance had to withdraw its activity from Canada. 

As a decentralized technology, cryptocurrency is difficult to be adopted or accepted worldwide, at least for now. For a country to allow crypto to be legal tender, its economy would need to be strong enough to withstand market volatility. More importantly, the government would need to impose regulatory rules approaching customers’ safety and law considerations. Some official bodies have provided a framework for crypto taxation, but it still lacks coverage on all aspects of blockchain technology. 

Companies must sign over to reach common ground to support Bitcoin in worldwide adoption. Let’s see what’s the attempt of Binance to take its activity to a new level. 

Binance announces the creation of a new platform for the Japanese audience

Binance recently wrote on Twitter about a new crypto trading platform they’ve developed exclusively for Japanese residents who use cryptocurrencies frequently. It will become available in the summer when further details will be provided on its functionality.

To comply with the country’s regulations, Binance also stated that a limited number of tokens would be supported for trading initially. Still, more products and services will be introduced as the platform continues to develop. In the beginning, around 30 tokens will be available.

The company aimed to comply with the country’s crypto rules as the Japanese market is not only one of the world’s leading economies but also has a well-developed tech ecosystem, so taking advantage of these two elements would help the company add more coverage to the crypto industry.  

Japan’s cryptocurrency regulations make it one of the most crypto-friendly countries

Japan was among the first countries to recognize the potential of cryptocurrencies, with people mining from the beginning when the coin had little value. But only in 2016 Japan recognized cryptocurrency as a form of money, but at that time, only 4% of the citizens used or owned cryptocurrencies, which was less than China or India. But after the pandemic, payment methods were shifted, and people preferred cashless payments to keep themselves safe.

However, Japanese banks don’t take cryptocurrency as legal tender since official bodies do not issue it, but they recognize it as purchasing power. This led to more Japanese banks releasing their own coins or adopting similar solutions to keep up with customer demand. Governments usually are not interested in the amount of cryptocurrency people use ―only when it exceeds 30 million JPY, which is also the case for fiat money.

When it comes to using crypto in Japan, people can buy and sell them only on exchanges approved by regulators in accordance with the country’s KYC and AML procedures and taxation. These businesses are chosen depending on various factors, from fees, ease of use and educational resources. If you’re buying cryptocurrency for the first time in Japan, you must download a crypto wallet on your phone first. Then, undertake the KYC steps, add your card information, go through the buying process, and transact the crypto from the exchange to your wallet.

Japan’s goal to digitize the country makes the crypto market more approachable

A few official bodies handle cryptocurrencies and work together, such as the Japanese Financial Services Agency (FSA), which regulates it, and the Japan Security Token Offering Association (JSTOA), dealing with regulatory aspects. Although most crypto transactions are allowed, lawmakers changed their view on derivatives trading and imposed restrictions to protect citizens.

On the other hand, the government is more interested in Web3, metaverse and NFT since they wanted to digitize national identity cards considering these digital solutions. There are no restrictions for people owning and investing in cryptocurrency, but there’s a clear framework on what is qualified as crypto asset exchange activity. This includes buying, selling, exchanging crypto, brokering, and custodian services.

To legally operate in Japan, exchanges must abide by the AML regulations and provide specific record-keeping documents and an annual compliance report.

Japan’s cryptocurrencies tax laws have fixed rates

In Japan, cryptocurrency is considered “miscellaneous income” in regard to taxation. As the National Tax Agency states, permanent citizens pay tax on income from trading, mining and DeFi lending. Anyone earning more than 200,000 JPY risks being taxed up to 55%, while non-permanent residents are taxed only 20%.

According to the law, cryptocurrency is seen as a utility token or crypto asset, but tokens are seen as shares, bonds and other similar financial products. These details must be settled at the end of the fiscal year, March 31, but if cryptocurrency is stolen, people don’t have to pay taxes on that. Cryptocurrency taxes are already high, which is supposed to change this year as a way to allow the Web3 industry to flourish.

Why are Japanese people interested in cryptocurrencies?

With a booming economy and developing technology, Japan is still open to improvement and new markets, which is why the country is available to new opportunities, like the crypto sector. And considering that Japanese people are already familiar with day trading, especially on foreign exchanges, they’re knowledgeable about the risks implied and trade or invest with a sense of responsibility.

The country has an increasing crypto adoption rate thanks to the technology-driven society, which makes an excellent target customer base for digital finance businesses. The Japanese market is a hub of technology and innovation that any company would like to emerge into, making the country attractive to foreign organizations.

Final thoughts

With a prosperous technology sector and interest in cryptocurrency, Japan is progressing in adopting it. However, considering the tight regulation, foreign exchanges and companies must comply with their rules to operate in the country; this is why Binance created a special trading exchange to allow Japanese people and businesses to use its products and services.