US-based cryptocurrency exchange firm Coinbase has opened an office in Japan as it prepares to make an entry into the new market. Nao Kitazawa, lauded as a fintech leader will be the new CEO.
The leading cryptocurrency exchange has a presence in over 32 countries worldwide. However, Japan will only be its second branch in Asia after Singapore.
Coinbase will now work closely with the Financial Services Agency which regulates cryptocurrencies to ensure it is compliant with local laws.
“As in other markets, we plan to take a deliberate approach to our rollout in Japan, which means working hand-in-hand with the Japanese FSA to ensure compliance with local laws at every stage,” Coinbase General Manager and VP Dan Romero said while making the announcement.
Plans to expand to Japan have been in the works since at least 2016 when the firm raised over $10 billion from Japanese investors. They included Japan’s largest financial services firm Mitsubishi UFJ Group as well as the Bank of Tokyo Mitsubishi UFJ.
MUFG recently announced a trial of its own native virtual currency was successful. Known as the MUFG coin, the digital currency is now being tested on a wider scale involving the bank’s customers.
The new CEO Nao Kitazawa has worked previously as Money Design as the COO. The company helped pioneer investment advice platforms in Japan. He has also worked at Morgan Stanley as an investment banker where he led several acquisition and merger deals. Nao also sits at the board of the Fintech Association of Japan.
Japan recognizes cryptocurrencies like bitcoin as a form of payment, one of the few countries to have done so. It however has one of the strictest anti-money laundering and know-your-customer rules.
The FSA regularly conducts physical inspections on exchanges to ensure compliance to strict security rules. The body started cracking the whip early this year after successive cyber attacks that saw the loss of millions of customers’ funds.
The largest cryptocurrency exchange in the world by volume Binance was recently hounded out of the country for operating without a license. Several exchanges were asked to shut down in March over weak security and anti-money laundering controls. A number were issued with improvement orders.
“As a regulated, compliant crypto company in the U.S., we will focus on building that same level trust with new customers in Japan,” Romero said in a statement.
Several companies have been angling to get into the vibrant Japanese cryptocurrency market.
Monex Group, one of the largest online brokerage firms in the country recently acquired Coincheck, the cryptocurrency exchange that was a subject of a massive hacking in January. Others include Yahoo Japan and Line.
Coinbase’s product line is also expanding to cater for institutional investors. The exchange lists Bitcoin, Bitcoin Cash, Litecoin, and Ethereum.