Bitcoin may be reaching its tipping point much faster than many predicted as three mega banks in Japan launched massive investments into the world’s most popular cryptocurrency. The banks, Mitsubishi UFJ, Mizuho and SMBC which are amongst the largest banks in Japan are now core investors in Japan’s largest Bitcoin exchange, bitFlyer.
Following a successful test which ran for about nine months to September 2016 for the domestic transfer of money over the Blockchain technology with bitcoin, the Tokyo based Fintech and Bitcoin Company has now fully partnered with these mega banks. In a recent statement, the company announced that investments branches of Mizuho Banking corporation, Sumitomo Mitsui Banking Corporation (SMBC) together with Mitsubishi UFJ Capital which has already injected about ¥510 million ($4.5 Million) in 2015 are investors in bitFlyer.
It would be recalled that in mid-2016, bitFlyer raised about ¥3 billion ($27million) in a record funding round which helped the company consolidate its standings in the Bitcoin exchange market. bitFlyer is currently the world’s largest Bitcoin exchange with over 400,000 active users and trading volumes exceeding ¥320 billion ($2.81 billion) as at January 2017.
What Does this Mean for the Future of Bitcoin
The move by these mega banks signals a key spin to the already burgeoning global Bitcoin industry in that it consolidates the much need awareness, trust and confidence in the digital gold. With the Japanese government gearing up to introduce new regulations later this year having already passed the bill to regulate virtual currency exchanges in mid-2016, this will benefit the Japanese and Asian markets in the short term but overall it is a massive leap for the global bitcoin market outlook keeping in mind that Bitcoin is a decentralised digital currency which means that all markets are deeply connected.
In early February, the price of Bitcoin climbed back to top the $1000 mark after a rough January following Chinese government involvement in Bitcoin exchange regulations in that country. The upward movement has caused some frenzied growth in Bitcoin adoption by several merchants, retailers as well as government institutions who want to money in on the solid Bitcoin bubble. Currently there are over 4200 merchants accepting Bitcoin in Japan alone and that number is estimated to rise to 20,000 this year according to reports by Resupress.
On the global front, recent comments and assertion from key government institutions corroborates the fact that Bitcoin is maturing with a global understanding, leaving regulations and its incorporation into the financial system as the only choice. L H Li, former president of the state-owned Bank of China and a member of the Financial Economic Committee at China’s People’s Congress had this to say when asked about his take on the rapidly growing cryptocurrency;
Bitcoin was built on a platform without national boundaries. If you want to kill bitcoin, it will be an impossible task. So, it will continue to exist. What’s important now is that we should properly regulate it
Consistent with comments by Kathryn Haun, Assistant U.S. Attorney & Digital Currency Coordinator, US. Department of Justice in 2013 concerning the future of Bitcoin, these realizations can only indicate global change in attitude towards the digital currency with governments now potentially treating Bitcoin businesses as an asset that should be nurtured and supported. To conclude, Christopher Langner from Bloomberg.com had this to say;
Bitcoin is still a small market, prone to dislocations, but as the variety of instruments around the currency grows, it’s starting to look more like the real thing
I have been in the Cryptocurrency ecosystem for about three years. My passion for this niche of financial tech space inspires me to share with you all I can in the world of Cryptocurrency, Blockchain and financial technology.