Japan’s Global Crypto Market Share is Dwindling, Says Exchange Chief

Japan’s once-dominant position in the global cryptocurrency market is reportedly on the decline, according to Genki Oda, founder of the SBI-owned BITPOINT crypto exchange. Speaking at the WebX2024 summit, Oda highlighted that Japan’s share of global Bitcoin trading has significantly decreased from its peak in 2017-2018. This shift has raised concerns about the country’s future role in the rapidly evolving crypto landscape. Oda’s remarks have sparked a debate on the effectiveness of Japan’s current crypto policies and the need for strategic adjustments.

Decline in Market Share

Genki Oda pointed out that during the peak years of 2017-2018, Japanese yen accounted for about 50% of global Bitcoin trading volume. This period marked Japan as a global hub for cryptocurrency activities. However, as of 2024, the Japanese yen’s trading volume has dwindled to a small fraction of the global share. Oda attributed this decline to several factors, including stringent regulations and a lack of innovation in the domestic market.

The decline in market share has been accompanied by a decrease in trading volumes on major Japanese crypto exchanges like bitFlyer. Over the past 12 months, trading volumes have shown a downward trend, reflecting the broader market dynamics. This has led to concerns among industry stakeholders about Japan’s ability to maintain its competitive edge in the global crypto market.

Oda emphasized the need for Japan to adopt more flexible and forward-thinking policies to regain its lost market share. He called for a collaborative effort between the government and the private sector to foster innovation and create a more conducive environment for crypto businesses.

Government Policies and Industry Response

The Japanese government has implemented a series of regulatory measures aimed at ensuring the security and stability of the crypto market. These measures include stringent KYC (Know Your Customer) and AML (Anti-Money Laundering) requirements, which have been praised for enhancing market integrity. However, industry leaders like Oda argue that these regulations have also stifled innovation and growth.

During the WebX2024 summit, Oda engaged with key lawmakers from the ruling Liberal Democratic Party (LDP) to discuss the impact of current policies on the crypto industry. Masaaki Taira, chair of the LDP’s web3 project team, acknowledged the challenges faced by the industry but defended the government’s approach. He emphasized the importance of balancing security with innovation to create a sustainable crypto ecosystem.

The government has also been exploring ways to support the industry through initiatives like tax reforms and funding for blockchain projects. However, the effectiveness of these measures remains to be seen, as the industry continues to grapple with regulatory hurdles and market competition.

Future Prospects and Strategic Adjustments

Looking ahead, the future of Japan’s crypto market will depend on its ability to adapt to changing global trends and technological advancements. Oda suggested that Japan could benefit from adopting more progressive policies that encourage innovation and attract international investments. He highlighted the potential of emerging technologies like decentralized finance (DeFi) and non-fungible tokens (NFTs) to drive growth in the crypto sector.

Industry experts have also called for greater collaboration between the government and private sector to address the challenges facing the crypto market. This includes creating a more transparent regulatory framework, providing incentives for startups, and investing in research and development. By taking these steps, Japan can position itself as a leader in the next phase of the crypto revolution.

The upcoming elections in Japan and the United States could also play a crucial role in shaping the future of the crypto market. The outcome of these elections will determine the policy direction of both countries and their approach to crypto regulation. As the global crypto landscape continues to evolve, Japan must stay ahead of the curve to maintain its relevance and competitiveness.