Launched on August 1, 2023, Binance Japan has intensified competition in the country’s already crowded cryptocurrency market. With a significant number of 34 cryptocurrencies, Binance Japan’s entry poses a challenge for smaller exchanges, many of which only offer one to five tokens.
By the end of August, there were 29 registered cryptocurrency exchanges in Japan. The global cryptocurrency downturn has exacerbated liquidity problems and a lack of differentiation between these smaller exchanges. Norbert Gehrke, founder of the Japan FinTech Observer newsletter, believes Binance’s entry has accelerated their decline.
In a strategic move to accelerate its official entry into Japan, Binance acquired the Sakura Exchange BitCoin platform in November 2022. This acquisition allowed the company to transfer its registration in the Osaka region to Tokyo, marking part of a broader effort to expand the industry into Asia. Pacific region.
However, Binance Global’s legal troubles abroad have raised concerns. In the US, both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have accused Binance of operating as an illegal exchange. Investigations are also underway in Australia, France and Brazil.
Despite these challenges, Japanese Prime Minister Fumio Kishida sees nationwide adoption of Web3 technologies as a key growth strategy. Tatsuo Oku of the Blockchain Collaborative Consortium hopes Binance’s participation will spark interest in the country’s Web3 industry.
Justin Dhingra of Crypto Garage notes an oversaturation in the number of retail crypto exchanges compared to demand, with only about three making real money. Coincheck, a successful Japanese exchange, has diversified its services with an NFT marketplace to leverage the country’s strengths in video games, anime and manga.
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