In some parts of the world, Yahoo! is a company that has all the attributes of a fading force. In Japan, it’s a different story entirely, as the Internet giant still has a huge market presence. Never a company to avoid diversification, the brand’s latest venture is certainly going to make it a trendsetter. According to recently released reports, Yahoo! has plans in place to launch a cryptocurrency exchange in 2019. Few would have been aware of Yahoo! having such strong crypto intentions, but it’s clear that the crypto market in Japan is now too valuable for large companies to ignore.
The changing face of the market
Revealed by the Nikkei Asian Review, Yahoo! plans to acquire 40% of BitARG Exchange Tokyo in a deal next month. This acquisition will provide Yahoo! with the foundations to launch its owns exchange “in April 2019 or later” if current plans prove accurate. Japan is emerging as a true crypto superpower, but with a strict licensing system coming into effect, it has seen many crypto exchanges leave Asia entirely. Binance recently made the decision to head to Malta, loosening its ties with both Japan and China in the process. This shift has seen a gap in the market open up, a gap that Yahoo! is seemingly looking to fill.
Yahoo! won’t be purchasing a stake in BitARG shares directly, instead it will come about through YJFX – a long-standing Yahoo! subsidiary that operates foreign exchange transaction services. The total value of the deal will cost Yahoo! approximately 2 billion yen (or $19 million). What the move represents is the arrival of yet another big name in Japan’s growing cryptocurrency sphere.
Navigating the FSA
Last year, Japan introduced a crypto exchange licensing scheme, which was more or less the first of its kind. It’s a system that’s produced mixed results, which has seen some high-profile exchanges choosing to leave Japan as a result. 16 operators have received full licensing clearance to operate in Japan, with this group of surviving exchanges including big banking sector powers like SBI Group. Another license holder is BitARG, which probably explains Yahoo!’s interest.
BitARG received its license from the Financial Services Authority (FSA) back in December 2017, with this only covering Bitcoin trading at this point. Yahoo! clearly has plans to become a major player, so rumors are already circulating about the company increasing the number of tradable cryptos. However, Yahoo! is going to need to learn quickly that the FSA still remains a controversial governing body that major exchanges can fall foul of. Binance is the largest cryptocurrency exchange in the world, but its failure to navigate the licensing system in Japan saw it effectively booted from the country. If Yahoo! is to succeed, it’s certainly going to need to take licensing measures extremely seriously.
Yahoo! makes its intentions clear
Yahoo!’s arrival in the cryptocurrency sector will have certainly caught plenty by surprise. Its cryptocurrency screener is one thing, but the launch of an exchange – in Japan of all places – is another thing entirely. However, the addition of another major name that has financial power to the crypto sphere will only increase its acceptance as a mainstream market.