Moreover, its rapidly aging population is putting a dent to its future prospects for growth and stability. However, if there was one thing done right, it willingly opened its doors to cryptocurrencies. Experts argue that Japan’s next economic revolution will be fueled by the development, implementation of cutting edge technologies, such as blockchain and cryptocurrencies.
As such, the Japanese government is doing its best to encourage innovation in this sector. In this article, we will explore some of the measures taken by Japan, to encourage blockchain growth.
Adopting crypto and blockchain friendly legislation
So far, several high-profile crypto hacks took place in Japan, leading to the loss of tens of millions of dollars. Because of this, the country’s authorities have decided to create a complete legislative framework that crypto and blockchain-related companies would need to follow. In return, this provides a secure system, where customers are protected and innovative projects can be trialed out without the fear of fraud. Additionally, Japan has also adopted a crypto taxation framework that is beneficial to those involved with cryptocurrencies.
Japan has also chosen to regulate the Initial Coin Offering market. As such, start-ups planning to hold ICOs must abide by Know-Your-Customer guidelines and must provide investors with details on how funds will be distributed. Lastly, all ICOs taking place in Japan have to offer investors a project tracking system, as a way to monitor company activity.
Evaluating blockchain companies
The Japanese Ministry of Economy, Trade and Industry has published an evaluation process for blockchain platforms. Its purpose is to maintain quality among blockchain-based services. As such, the methodology takes 32 aspects into account, including reliability, scalability, performance, interoperability, the number of nodes and more. A report states that in the future, Japan will pursue a standardization of blockchain evaluation systems at an international level. However, multiple sources have reported that these government agencies have already been talking to each other at an international level, but behind closed doors.
Introducing a blockchain voting system
Tsukuba, Japan might become the world’s first city to offer citizens the ability to vote via a blockchain-based platform. The system will be mostly used for social contribution projects, and will require people to verify their identity prior to casting their votes. The blockchain attributes of the system will be utilized to improve security, transparency and prevent fraud.
Creating a blockchain-based government contract system
The Japanese Ministry of Internal Affairs and Communications is reportedly working on a blockchain-based platform for accepting government tenders and contracts. To better put things into perspective, as part of the tendering process, governments often ask vendors to provide offer contracts. The data is then used to award government-funded projects to private entities. A blockchain-based system would make it easier to read and compare the contract offers, while also stamping out potential human bias and corruption.
The next step
A year ago, the Japanese authorities may have been less knowledgeable about the blockchain and cryptocurrency space. However, we believe that today, they are definitely at the forefronts, collecting and absorbing information as the industry progresses. This is the result of its rather soft-handed approach – based on consensus, self-regulation and sharing of information, has indeed set it apart. Many exchanges see them as partners instead of a rival.
Based on everything that has been outlined so far, the next step towards ensuring a blockchain-powered future for Japan, would be to study more government incentives for blockchain-based start-ups to setup in Japan. If this is done swiftly, and effectively, Japan will soon be a cryptonation!
Daniel is a digital currency expert, writer, investor and ICO consultant. He writes for several top cryptocurrency publications, and will soon kick-start his entrepreneurial career in fintech, where he hopes to innovate. In his free time, Daniel enjoys travelling and collecting all sorts of thrilling experiences.