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Bitcoin market rages in Japan

Ⓒ AFP/Archivos – Toru Yamanaka – | A shop in Tokyo announces that it accepts payment with bitcoins, in an image dated April 7, 2017

“I invest all my savings in bitcoins,” says Mai Fujimoto, nicknamed “Miss Bitcoin” on social networks, who, like many Japanese, now resorts to the most popular cryptocurrency, also recognized as a means of legal payment in the country.

In December, close to 31% of global bitcoin sales were made in yen, behind the dollar (44%) but ahead of the South Korean won (18%) and the euro (6%), according to jpbitcoin.com, which compiles the data of the sector.

The share of Japanese investors in this market has increased since the prohibition last year of exchanges of cryptocurrencies in China.

Japan did the opposite and a law that came into force in early 2017 recognized the bitcoin and other virtual currencies as legal means of payment, although it reinforced the demands of transparency and financial strength to the local market operators.

This favorable regulation prompted Japanese computer groups to launch in this new sector, while thousands of businesses in the country began accepting payments in bitcoin, often to advertise in the local media.

“The participation of big companies, the feeling of security generated by the government’s green light and the media exposure have led completely new people to this market” of bitcoin in Japan, says Koji Higashi, 29, a specialist in the sector, and he himself investor in this virtual currency.

– Miss Bitcoin –

Mai Fujimoto, 32, has been a great supporter since 2012. “At the time, I was looking to create an online donation platform for the education of children in developing countries (…) I realized to what extent It was expensive to send money abroad, “he told AFP.

“When I learned that it was no longer necessary to go through banks if I used bitcoin payments, I was really impressed,” he adds.

“I have invested all my savings in the bitcoin and in other cryptocurrencies for a year (…). I no longer have savings in the bank,” he says.

Nothing, however, augured such success of the bitcoin among the Japanese, known for their extreme prudence, their predilection for savings and cash payments.

The first attempts of the bitcoin to prevail in Japan were frustrated in 2014 with the spectacular bankruptcy in Tokyo of the MtGox exchange platform.

His former manager, the French Mark Karpelès, is tried since last year in Tokyo for manipulating data and diverting funds, accusations that he rejects.

– Fiscal puzzle –

“Many Japanese are very conservative about risk, but we have a retail business in the foreign exchange market and many individuals negotiate high sums in this market,” said Yuzo Kano, executive chairman of bitFlyer, today the main bitcoin business platform in Japan. .

In addition, many Japanese speculators resort to cryptocurrencies such as bitcoin, according to a recent note by Deutsche Bank analysts.

Prolonged low interest rates in the country – the result of a very expansive monetary policy of the Japanese central bank – encourages seeking better-paid alternative investments, says Kano, a former employee of Goldman Sachs and BNP Paribas.

This option is not rational and obeys to an effect of contagion, nevertheless Koji Higashi thinks. “Everybody does it and I’ve heard that you earn a lot of money, so I do too,” he explains to sum up this state of mind.

But this furor could be appeased by the fact that any profit obtained in these markets will be subject to a very high taxation rate of 55%.

“Many investors do not know the amount that will be subject to taxation,” says Hugashi, who predicts “many tax evasion scandals in the near future.”

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