Coinbase, the largest US crypto exchange, and one of the largest ones in the world, finally found a way into the Japanese crypto market. Since it was founded, the exchange expanded to the UK, as well as many other countries in Europe and elsewhere. However, Japan’s strict rules on who can and can’t open a crypto exchange in the country have held Coinbase out of the country’s crypto market — until now.
According to a recent announcement published by the exchange, Coinbase is entering Japan through a new partnership with Japan’s financial giant, Mitsubishi UFJ Financial Group (MUFG). The announcement was posted only yesterday, Wednesday, August 18th. It revealed that Coinbase Japan is about to launch, and that it is a part of the exchange’s global strategy.
With Japan’s crypto market being one of the largest in the world, according to trading volumes, it makes sense for the exchange to expand there. Coinbase also aims to be the easiest to use, as well as the most trusted cryptocurrency exchange in Japan. Naturally, it also plans to be fully compliant with all the local regulations.
The partnership with Mitsubishi UFJ is also of great importance. This is one of the largest banks in the country, and it serves 40 million customers. As such, it will allow those customers to access fiat on- and -off-ramp through its Quick Deposit service-.
Originally, Coinbase intends to support the trading for only five largest digital currencies by trading volume — Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Stellar. However, it feels confident about the ability to onboard a lot more assets in months to come. Still, it was careful not to list any names, potentially in fear of giving false promises, as Japan is pretty strict about which cryptocurrencies can be offered for trade, too.
Finally, Coinbase also revealed that it has made plans to launch other localized versions of its service, including advanced trading for professional traders, as well as a special branch that will cater to the needs of institutional investors.
Coinbase in Japan
As mentioned, Japan is rather strict about its crypto rules. It became the first country to allow users to make payments with Bitcoin, which was years before the crypto market went big. At the time, most other countries, regulators, and even banks were ignoring digital coins and laughing off the idea that they will someday come to threaten traditional finance. Japan, on the other hand, did not.
But, that also means that it had more time to develop its crypto rules, which are stricter than those of most countries that have a set of rules to begin with. The country currently has only 31 licensed companies that are allowed to trade assets. One of them, and Coinbase’s largest local competitor, will be Coincheck Inc, owned by GMO Coin Inc and Monex Group Inc.
Coinbase Japan will be led by Nao Kitazawa, a former Morgan Stanley banker, who stated earlier today that Coinbase’s branch in Japan aims to reach out to a wide range of customers by offering low-hurdle services.’ Any MUFG Bank’s customer will be able to easily buy or sell digital currencies on the newly-launched exchange.
Coinbase and MUFG have a long-term relationship since MUFG is one of those who invested in Coinbase Global. This is why this bank, and this bank alone, will be working with Coinbase Japan. Kitazawa confirmed that account holders at other banks will not be able to make transactions to and from Coinbase. As a result, the exchange will gain access to MUFG Bank’s 40 million additional users, while the bank might attract even more new clients thanks to this unique benefit of accessing Coinbase through its service.
Coinbase Japan is looking to hire
Coinbase Japan’s staff currently consists of around 30 employees, meaning that Japan’s branch of the exchange is looking to hire new team members for product development. The exchange is starting off by targeting retail customers, but Kitazawa is optimistic about the idea of servicing institutional investors, given their growing interest in cryptocurrencies, the growing number of asset management firms, pensions, as well as endowments, all of which are allocating money to crypto.
He revealed that there is already a growing number of potential institutional clients who are interested in talking to the exchange. Not only that, but Kitazawa noted that these people are becoming increasingly better educated about cryptos, given that their questions have been getting more specific as of late.
So, with enough demand, Coinbase Japan may also start looking to hire more staff to cater to institutional investors, as well.