“Rakuten” means “optimism” in Japanese, and with all the effort the e-commerce leader has been pouring into blockchain and crypto development over the past years, that positive moniker makes sense.
With a market cap of $14.5 billion, over 17,000 employees worldwide, and $10 billion in sales as of May, Japan’s internet commerce behemoth is ubiquitous in the land of the rising sun, and elsewhere.
Rakuten, the “Amazon of Japan”, announced the launch of its new crypto exchange platform Monday, August 19, offering spot trading of crypto assets via a dedicated smartphone app.
The e-commerce giant has been crypto-friendly for a while now, experimenting and investing in crypto payment systems since at least 2014, but with the launch of the wallet exchange service, Rakuten Bank users are now able to buy, sell, and exchange BTC, BCH, and ETH, as well as utilize fiat off-ramps to personal bank accounts. Other formidable forces in e-commerce are working hard to jump on board the crypto train as well.
Optimism for Crypto
In a press release from Tokyo yesterday, Rakuten Wallet Inc., a subsidiary of Rakuten Group, announced the start of its long-awaited crypto trading app and exchange service:
Through the smartphone app, customers can make transactions for crypto asset trading accounts, such as depositing/withdrawing Japanese yen and depositing/withdrawing crypto assets, 24 hours a day, 365 days a year…Three types of crypto assets can be traded: Bitcoin, Ethereum (ETH), and Bitcoin Cash (BCH).
The app features a multisig-based “cold wallet” for user funds, and “There are no fees for opening or managing an account, purchasing or selling crypto assets, or depositing money”, according to the press release. While the company uses the term “cold” in describing the wallet, it is important to note that the actual meaning here is simply offline storage, and as such security is not solely in the hands of the account holder.
Application Process: Convenience In, Privacy Out
For those applying for a Rakuten Wallet account, the process is pretty straightforward. “Customers who already have a bank account with Rakuten Bank will be able to easily open a Rakuten Wallet account simply by entering the required information on the online application form”, the press release confirms.
However, privacy-minded crypto users may find the application off-putting. Japan is arguably the world leader in crypto regulation and adoption, with rigorous KYC and AML protocols implemented industry-wide thanks to Japan’s FSA (Financial Services Agency). The veritable dating game-style personal quiz prior to signing up is reflective of this reality.
Applicants must answer several questions even after opening a Rakuten Bank account including private details relating to one’s job, purpose for opening the account, and income. They must also state how many years they have been active in the crypto space. This is in stark contrast to private, P2P exchanges like local.bitcoin.com, where the only thing needed is an email address.
Rakuten’s Push Echoed by Amazon, Others
Establishing the Rakuten Blockchain Lab in 2016 after an earlier investment in Bitnet, a wallet/payments software firm in 2014, Rakuten is no stranger to crypto. In terms of the breakneck speed proliferation of Japanese regulations and crypto adoption, 2014 seems like light years ago to most. The Tokyo-based company is not alone, though, with other movers and shakers in the industry having also been putting in the time and research, and now seem to be making plans to jump on board with similar projects.
An official patent document from May reveals that Amazon is researching Merkle Tree solutions to proof-of-work challenges for unknown applications. Though Amazon does not directly accept crypto payments like Rakuten’s American site does, via the integration of the Bitnet portal, similar developments may soon be in the works for America’s retail juggernaut. Already the Amazon Coin digital currency is a reality.
Rakuten’s CEO, Hiroshi Mikitani, announced in early 2018 that the company was working on its own crypto token, “Rakuten Coin” to be integrated with the extremely popular Rakuten points system in Japan. Currently these points can be exchanged for bitcoin via the Japanese site.
Amazon has further created a stir in the media in past years by buying up crypto-related domain names such as amazoncryptocurrency.com, amazoncryptocurrencies.com, and amazonethereum.com. While this could be simple brand protection, based on the company’s recent research and investments, real speculation does seem warranted. Especially considering that other companies on similarly herculean tiers of mega financial success like Walmart, Facebook, and Google are all investigating and experimenting with blockchain and crypto as well.
Japan Still Skeptical of Exchanges
Though the Rakuten announcement is big news for crypto enthusiasts in Japan, some remain skeptical. With massive losses of funds at Mt. Gox, Coincheck, and most recently Bitpoint, customer confidence in Japan-based exchange services has suffered. Even lesser known issues relating to regulatory changes have left a sour taste in the mouth of many. Tokyo-based exchange Bitflyer, for example, froze user accounts in 2018 with no clear notification, citing “general maintenance” and the need to comply with official regulatory audits. Some users had crypto frozen on the exchange for weeks, with little to no assistance from customer service.
Rakuten’s Positive Push
Japan’s troubles of the past notwithstanding, Rakuten Wallet is pushing forward, with its Android app already available and an iOS implementation expected sometime in September. The service is set to be available 24-7, 365 days a year, except for maintenance periods. Fees only apply for withdrawals of Japanese yen and crypto assets. According to the press release “The app also features many useful functions that allow customers to effectively manage their crypto assets, such as confirmation of assets deposited in Rakuten Wallet, the purchase and sale of crypto assets, and real-time chart rate confirmation.”
The optimistic foray into crypto is perhaps to be expected from the group that is already an online mall, credit card company, Japan’s largest online bank, and owns an actual baseball team. With Rakuten riding the crypto wave in the East, and spreading integration worldwide, it can’t be too long until other giants follow suit.