Coinbase Inc., the operator of the largest U.S. cryptocurrency exchange, is setting up shop in Japan, where much of the world’s bitcoin trading takes place.
The San Francisco-based company named
a former Morgan Stanley banker turned fintech executive, as its new Japan CEO. Coinbase said it is working with Japanese regulators to ensure it complies with local laws. It didn’t offer a time frame for when it expects to commence operations.
Coinbase, which was founded in 2012 and runs the largest U.S. digital-currency exchange by volume, said it currently operates in 32 countries including Singapore. Yet it has lacked a significant presence in Asia, one of the driving forces behind bitcoin’s surge last year.
“As a regulated, compliant crypto company in the U.S., we will focus on building that same level [of] trust with new customers in Japan,”
vice president and general manager of Coinbase, wrote on the company’s blog. He said the expansion was part of Coinbase’s efforts “to accelerate the global adoption of cryptocurrency.”
Japan has long been a hotbed for cryptocurrency trading. Rules that took effect in Japan last year established bitcoin as a legitimate payment method and helped the digital currency flourish in the country. About two-thirds of bitcoin trading is yen-denominated, according to data provider Coinhills.
But Japanese regulators have tightened their grip on the market in recent months, after cryptocurrency exchange Coincheck Inc. in January lost more than $500 million in customer funds. Regulators have since suspended operations at some exchanges.
Exchange operators have had mixed success in Japan. In April, San Francisco-based cryptocurrency exchange Kraken said it was ending its trading services for Japanese residents. Also in April, internet brokerage
said it was buying Coincheck for $34 million and aimed to fully restore its operations. Messaging-app operator Line Corp. is one of several companies waiting on regulatory approval to open a cryptocurrency exchange.
Coinbase operates a popular app that people use for storing, trading and transferring bitcoin and collects fees when customers buy or sell the cryptocurrency. At one point in December, Coinbase was the most-downloaded free app in
App Store. The company has been trying to branch out beyond its core base of U.S. individual investors, and last month unveiled plans for new services aimed at hedge funds and other big investors, such as brokering large-scale cryptocurrency trades.
The price of bitcoin recently traded at around $7,400, according to research site CoinDesk. It has lost more than half its value since peaking near $20,000 in December. Still, it is significantly higher from early 2017, when it started the year below $1,000.
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