Binance, the world’s largest cryptocurrency exchange, is seeking a license to operate in Japan, four years after pulling out of the country because it lacked a license, according to people familiar with the matter.
The country’s easing approach to crypto and substantial user growth potential are key reasons for Binance’s renewed interest in the world’s third-largest economy, one of the people said.
Japanese Prime Minister Fumio Kishida’s program to reinvigorate the economy under the rubric of “new capitalism” includes supporting the growth of so-called Web3 companies. The term “Web3” refers to a vision of a decentralized internet built around blockchains, the underlying technology of cryptography.
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“It would be inappropriate to comment on conversations with regulators,” a Binance spokesperson said in response to a request for comment. Binance is “committed to working with regulators and policymakers to develop policies that protect consumers, encourage innovation, and move our industry forward,” the spokesperson added. A Financial Services Agency official declined to comment.
Last month, Japan’s financial regulator proposed to relax corporate tax rules for crypto-assets. Lobby groups have called for change, saying high corporate taxes are pushing some businesses to relocate to Singapore and elsewhere.
Binance is not the only foreign company looking to enter the Japanese cryptocurrency market. Temasek-backed Amber Group this year acquired DeCurret Inc., a crypto exchange that has been operating in the country since 2018.
Changpeng Zhao, founder and CEO of Binance Holdings Ltd., during a panel discussion on day two of the Viva Technology conference in Paris, France, Thursday, June 16, 2022. (Photo: Bloomberg)
The measures taken by Japan contrast somewhat with the tougher regulatory oversight emerging in a series of countries after a wipeout of $2 trillion in digital assets from last year’s peak led to explosions in hedge funds and crypto lenders.
Binance’s billionaire co-founder Changpeng “CZ” Zhao in 2018 abandoned plans to build a base in Japan, following securities regulator investigations that led to an official notice to halt to operate in the country without a license. He received a similar warning three years later for breaking registration rules.
In Asia, Binance has a presence in countries like Thailand, Malaysia, Indonesia, and India through partnerships.
Binance has been the target of regulatory investigations in various jurisdictions, including the United States. In response, the company said it was working with the authorities and would continue to meet the requirements set by the authorities.