As with all innovation,
blockchain technology can only develop so far before it faces legal hurdles
making it necessary to create an acceptable legal framework to grow within.
So far, even the
leading blockchain countries have been slow to accommodate this fast-growing
business and technology development, thus hindering and even blocking it from
achieving its potential.
In terms of blockchain
regulation, Japan seems to be dragging its heels relative to other nations even
though it has been hailed as the gold standard for blockchain adoption. One of
the panelists from AIKON's The New Normal of
Blockchain & Cryptocurrency talks organized in late October is Sota Watanabe, the CEO of Stake Technologies, and someone who was
able to bring us up to speed with the developments in his country.
According to Mr.
Watanabe, Silicon Valley is the most advanced region in the world when it comes
to the development of blockchain technology and its integration with the
existing systems, which is supported by its ability to attract a large number
of investors.
In comparison,
blockchain in Japan is late by two-three weeks in terms of development, which
also seems to reflect on the number of companies that make real products.
This information is at
odds with the general opinion surrounding blockchain development in Japan. For
instance, in July 2020 CoinGeek reported rapid
blockchain industry growth - by over 30% since 2019 - in the first half of the
year despite the global economic slowdown as a consequence of the global
pandemic.
The report stated that
there were 430 companies present on the Japan blockchain market in May this
year, 64% of which focused primarily on blockchain technology, while the rest
was present on the market in a secondary capacity. Furthermore, almost half of
the companies were labeled as corporations, thus signaling that blockchain is
not limited to startups in Japan.
However, the effects of
COVID-19 on Japan's economy are apparent - they have yet to release J-Coin! This was the supposed
digital coin that Mizuho and 60 other Japanese banks aimed to launch this year
to replace cash.
Mr. Watanabe was of the
opinion that Japan should move towards enabling blockchain technology to
develop as part of a national strategy. In this sense, China is a shining
example of setting up a favorable pace in which legislations are being pushed
and enforced.
According to his own
experience with the blockchain legal framework, the Chinese government is
moving forward strongly into the blockchain space and is quickly approaching
adopting cryptocurrencies into its financial system.
They are already shaping
their overall policies to include cryptocurrency transactions in the long run,
and even utilize bitcoin by the country's defense system. By all accounts, it
seems that China is able to recognize the low-cost system of trading bitcoin,
which is where Mr. Watanabe believes the greatest potential lies for Japan as
well.
He also indicated that
there are still security concerns surrounding Bitcoin and blockchain adoption
in Japan - where entities interested in using it still have a negative view of
cryptocurrencies in general and are harboring fears that they are easily
hackable and dangerous to use.
In that sense, Mr.
Watanabe was quick to point out that bitcoin hadn't been hacked in 11 years
(since its inception), even though it has been in use 24/7 since then and
despite numerous attempts. He hails this as a tremendous feat and proof that
bitcoin is safe which also contributes to its ability to hold value.
In addition, Mr.
Watanabe reflected on his desire to create a public blockchain and his own
token from scratch. However, blockchain regulation in Japan is still being
outlined to be able to provide the necessary support. Countries in general have
difficulties recognizing the immense potential blockchain can bring and reflect
it in their legal and taxation policies, but among the locations that seem to
be advancing in that sense, Singapore stands out.
This has led Mr.
Watanabe to move his operations there, but still stay focussed on championing
the necessary changes for contributing to blockchain development in Japan.
In the end, the
potential of blockchain technology in Japan, and in general, is very much on
his mind in terms of the value of the Internet and the consensus of time and he
plans on broadening his future work along those lines.
It leaves us hopeful
that blockchain will find a clear path to integration into a wide range of
systems across the world with highly competent and visionary people leading the
charge.
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This article originally appeared on
aikon.com.
Photo by Louie Martinez on Unsplash