Japan Railways Group, the biggest railway and subway operator in Japan that is used by millions of Japanese individuals on a daily basis, is considering the integration of crypto assets like bitcoin as a payment option.
According to ANN News, a mainstream commercial television news network in Japan run by TV Asahi Corporation, JR Group is currently planning to establish a cryptocurrency company, possibly an exchange in partnership with a major bank, to integrate cryptocurrencies.
MASSIVE BOOST IN CRYPTO AND BITCOIN ADOPTION
If JR Group moves forward with its plans to integrate crypto into the Suica card, the national public transport card that is used by residents for various payments including subway transactions, it has the potential to become the biggest stimulus in retail and mainstream cryptocurrency adoption to date.
Based on the report of ANN News and the reported plans of JR Group to establish a new cryptocurrency venture, it is likely that the company would like to create its own exchange or infrastructure to process payments, similar to Rakuten.
Last year, Rakuten, the biggest e-commerce company in Japan known as the country’s Amazon, acquired a bitcoin exchange called everybody’s bitcoin for $2 million and placed the exchange under its subsidiary called Rakuten Payments.
Local analysts speculated that Rakuten acquired the exchange to potentially integrate crypto payment options into its platform in the future without passing the profits generated to a third party such as a cryptocurrency exchange or a payment service provider.
By creating its own company, JR Group will be able to generate a new source of revenue in the form of transaction fees from cryptocurrency payments it processes.
The ambitious business model of JR Group to establish its own venture and quite possibly create a competing cryptocurrency exchange suggests that if the company integrates a crypto payment option, it expects the demand from users to be sufficiently high to justify the allocation of new resources into a new venture.
There also exists a possibility that JR Group could consider the integration of bank-created cryptocurrencies and Mizuho, a leading financial institution in Japan, is currently in the process of developing a cryptocurrency.
Japan is the ideal market for a transport conglomerate to integrate cryptocurrencies due to the large mainstream awareness of crypto.
Recently, Bitwise Asset Management revealed in a presentation to the U.S. Securities and Exchange Commission (SEC) that 95 percent of the volume in the crypto market is fake and that only a handful of exchanges have real daily volume.
Among the exchanges with real daily volume was BitFlyer, the biggest cryptocurrency exchange in Japan, and the rest of the exchanges were based in the U.S.
Japan remains as the second largest cryptocurrency market, mostly in part due to the forward-thinking and open-minded approach of Japanese regulators toward cryptocurrencies and blockchain technology.
JAPAN IS ALREADY LEADING IN MERCHANT ADOPTION
Bic Camera, the largest electronics retailer in Japan, has been accepting bitcoin for over a year and in mid-2018, amidst an 85 percent correction in the crypto market, Bic Camera disclosed that the usage of bitcoin across its stores nationwide has increased.
Masanari Matsumoto, Bic Camera’s PR and IR Chief, told Bitcoin.com:
When Bic Camera first installed the Bitcoin payment system in its stores, we expected that the customers paying in Bitcoin would mostly be foreigners. We noticed that Bitcoin was becoming very popular. Then the government announced that Bitcoin was officially legal, so we finally felt more comfortable introducing Bitcoin as a method of payment in our stores. Bic Camera always aims at responding to its customers’ demands, and there was a huge demand at the time.
In the months to come, as the cryptocurrency industry of Japan grows with the involvement of conglomerates, merchant adoption and overall mainstream adoption of cryptocurrencies are expected to grow.