Under the revisions to the Funds Settlement Law, issuers in Japan must guarantee the assets backing the stablecoins they introduce. Furthermore, the issuing entities are restricted to certain organizations such as banks, fund transfer agencies, and trust companies. In contrast, for stablecoins issued outside Japan, distributors, not the issuers, bear the responsibility to protect the associated assets.

An additional change is driven by anti-money laundering (AML) efforts. Distributors will be required to maintain a record of all transaction information, thereby increasing transparency and accountability in this rapidly evolving sector.

JPYC Inc., a known issuer of ERC-20 standard prepaid stablecoins for non-crypto assets, is planning to leverage these changes. The company has expressed its intention to register as a fund transfer operator and to launch yen-based stablecoins, highlighting the growing interest in the market.

Progmat, a digital asset issuance, and management platform spearheaded by the Digital Asset Co-Creation Consortium, is also poised to capitalize on the new regulations. The consortium, which includes several major banks, leading securities firms, and over 200 crypto asset exchanges, plans to release Progma Coin, a stablecoin that aligns with domestic regulatory standards.

While the updated law may incentivize various companies and organizations to issue their own stablecoins and develop related products, it’s essential to understand the Japanese government’s objectives. The primary intent does not seem to be to encourage Decentralized Finance (DeFi), which is the prevalent global use case for stablecoins. Rather, the focus appears to be on improving the efficiency of business-to-business (B2B) payments, which are estimated to exceed 1,000 trillion yen annually.

For international crypto projects eyeing the growing demand for stablecoins in the Japanese market, aligning with the Japanese government’s intentions could be crucial. When developing partnerships and implementing products, these intentions need to be considered to successfully navigate this new regulatory landscape.

With Japan at the forefront of crypto regulation, it will be interesting to see how this new law reshapes the crypto market in the years to come. Stay tuned for more updates on Japan’s evolving cryptocurrency landscape.

In particular, regulatory trends have a significant impact on the activities of the community.

In this article, we would like to share the regulatory trends and the status of the community in China, Japan, and South Korea, which have a particularly large presence in the crypto market.

China

– Market Trends

After China announced strict regulations on May 19 this year, including a total ban on mining in the country and a ban on all virtual currency-related transactions for banks, not only businesses related to virtual currencies but also individual investors and virtual currency-related activities have been sluggish. It has been said by those involved that these developments were a performance in preparation for the 100th anniversary of the founding of the Chinese Communist Party on July 1, and that regulations will not become more stringent after August.

On July 16, the People’s Bank of China released a white paper on the digital renminbi. The exodus of businesses related to public chains such as Bitcoin, that governments can not manage easily, is expected to continue.

– Community

As a result of the recent stringent crypto regulations, there have been reports of the suspension of accounts and groups that publish crypto-related information, especially on social networking sites such as Weibo and Wechat. In addition, crypto-related media tended to refrain from mentioning information related to specific projects, especially token sales, which resulted in a slowdown in investment activity. This situation is expected to improve after the 100th anniversary of the Chinese Communist Party.

Korea

– Market Trends

Due to the amendment of the “Act on Reporting and Use of Specified Financial Transaction Information” (Special Commercial Code) enacted in March this year, cryptocurrency exchanges need to submit a report to the Financial Intelligence Unit (FIU) by September 24 in order to conduct business. Since trading is not possible without obtaining a real-name certified account from the bank, exchanges have decided to delist a large number of listed coins in order to obtain real-name certification from the bank, essentially halting new listings of the currency.Furthermore, on July 26, the financial regulator announced that it would aggressively crack down on virtual currency exchanges outside of South Korea. The development of a central bank-issued digital currency (CBDC) is also being actively pursued in South Korea, and the Bank of Korea, the country’s central bank, has selected Ground X, a blockchain subsidiary of South Korean internet giant Kakao, as the pilot operator of the CBDC. Kakao will work with US-based Consensys, led by Ethereum co-founder Joseph Rubin, to develop the CBDC.

– Community

As the Bitcoin price has been weak, the community has been active in investing in emerging projects and monetizing them using DeFi’s yield farming. DeFi stocks are particularly popular, and there is a lot of interest not only in token sales but also in BSC-based yield farming with high APY.

Japan

– Market Trends

New altcoin deals are active: $DOT, $OKB, $TRON, $XYM, $ATOM, and $ONT have been listed since the beginning of 2021.

The first domestic IEO by CoinCheck was also conducted in July. PLT, a Japan-based NFT project, was offered for sale, and the hard cap of $9M was sold out in minutes. Coincheck is the subsidiary of Monex HD, a major online securities firm, and it is believed that many general investors participated in the sale. It will be interesting to see how the price of PLT tokens changes after the listing.

In addition, the NFT boom that began in 2020 has triggered a major trend in investment in NFT products and NFT-related tokens. Core NFT fans enjoy collecting all kinds of NFTs, both domestic and international, and not only Ethereum is a major NFT platform, but also Polygon, Flow, and BSC with low transaction fees are popular.

– Community

Twitter is by far the most popular platform in the Japanese crypto community, but recently crypto Youtubers have been gradually increasing. However, Youtube’s crypto community has a relatively low literacy user base, and most of them use Japanese exchanges instead of foreign exchanges. Therefore, most of the crypto-related contents you can see on Youtube are about bitcoin trading or altcoins that are sold in Japan.

The AMA format is also gaining popularity, lagging behind the rest of the world. In Japan, there are not many groups that exchange information about altcoins in general or new promising projects, but some of them have recently invited foreign projects as guests and held AMAs. User activity is high at the moment, and no bots have been found for airdrops.

FEB Inc. has a crypto-focused marketing agency division that provides tailor-made, effective, and low-cost marketing services in line with the latest trends in the crypto community in East Asian countries.
If you need our help, please feel free to contact us via inquiry form below!

Inquiry form: https://fareastblockchain.com/#contact

25th, June, Tokyo – FEB inc. conducted a survey on trends in the crypto space, including NFT, among crypto professionals such as crypto exchanges, consulting firms, media, SNS influencers and researchers in China, Japan, Korea and Russia.

NFTs Most Popular in China, Sluggish in Russia

Through a question that asked about the popularity of 16 NFT products and 7 NFT blockchains, we found differences in the activity of the trends in each country. In China, both NFT products and NFT blockchains are popular, and the trend is the most active. Japan and South Korea are the next most popular countries, followed by Russia, where there are few active trends in either NFT products or NFT blockchain.

NFT is the second most active trend after DeFi

When asked which of the four areas (NFT, DeFi, Stablecoin, and ICO) is the most active, 47.8% say DeFi, which was the most common response. This is followed by NFT with 34.8% of respondents and ICO with 17.4% of respondents. None of the respondents answered Stablecoin or Security Token.

Regional differences in popularity of blockchain and products

When asked about the most popular NFT blockchains, Ethereum dominated with 84.2%, followed by Ethereum in China, Chiliz in Korea, Enjin and Flow in Japan, and Theta and Flow in Russia. 

In the question asking about the most popular NFT products, NBA Topshot is the most popular answer, with 38.4% of the total. This is followed by CryptoKitties at 21.7% of the total.

As for the regional characteristics of the most popular NFT products, NBA Topshot is the most popular in China, followed by CryptoKitties, Topps MLB, Axie Infinity, and MyCryptoHeros.

In Japan, NBA Topshot and MyCryptoHeros are tied for the most popular, followed by CryptoKitties, Sorare, and F1 Delta Time. In Korea, CryptoKitties is the most popular, followed by NBA Topshot and MyCryptoHeros. In Russia, responses are mixed, but CryptoKitties is the most popular, followed by CryptoPunks.

In terms of NFT marketplaces used, Opensea is by far the most popular, accounting for 61.8% of all responses.

NFT is a bubble, DeFi is not

In response to the question of whether NFT or DeFi is a bubble, more than 66% of all respondents answered that “NFT is a bubble,” which is more than double the number of respondents who answered that “DeFi is a bubble”. However, the number of respondents who answered that “NFT is a bubble” in China is about half that of the total, which suggests that the current excitement about NFT in China may be considered to be in line with its intrinsic value.

In this article, we would like to share some simple insights to help you better understand each of the mentioned markets.
First of all, on a very basic level, these three countries, which are often equated by the Western world, have very different linguistic and cultural backgrounds, and fundamentally there is no common trend in terms of projects, services, regulations, or communities surrounding the crypto industry, and each is developing in its own way.

In the previous article, we took a look at the crypto market in South Korea. Let’s take a look at Japan this time!

Market Environment

In fact, many users use overseas exchanges, but in principle, cryptocurrency exchanges in Japan have to be licensed, and there are 25 exchanges*1 that have their licenses. The list of currencies handled by Japanese exchanges is commonly referred to as the white list, and it is very limited, with about 16~20 major cryptocurrencies.
After the massive hack of Coincheck in 2018*2 , the authorities audited the exchanges and demanded their operations improvement. In 2020, once the operational improvements are complete, the initial listing of altcoins starts again. With the implementation of the 2x limit on leveraged trading in May 2020*3 , altcoin investment is attracting more and more attention.

Habits

Japanese people are generally known for depositing their surplus funds, rather than investing them*4 . However, cryptocurrency investment has been participated not by such conservative older generations, but by younger generations, mainly in their 20s and 30s, and cryptocurrencies have been actively invested from Japan even on a world scale. However, there are many investors who do not have a high level of investment literacy, and they tend to invest in altcoins rather than long-term holdings of relatively trusted ones, such as Bitcoin or Ethereum. Leveraged trading on exchanges, including overseas exchanges, is also popular.

Media

There are about 5 to 10 media outlets specializing in cryptocurrencies, including Coinpost, Cointelegraph JP, both showing ones of the largest PV in the world. Each media has its own characteristics, such as strong in timely delivering breaking news, deep insightful analysis, utilization of social media.
As for the crypto community, Twitter has the largest and most active community. Users from various walks of life, including developers, investors, traders, entrepreneurs, and media people, are actively sending out information on a daily basis, and there are many influencers with thousands of followers or more. However, since the number of PR influencers is generally very small, it is important that the project has the potential to resonate with influencers and that the way influencers contribute to the project is properly planned.
LINE is the most popular messenger group in general, but it has a history of being used for scams in the crypto community, so it does not have a good image. Telegram is being utilized the most. However, with the recent release of LINE Open Chat, which can be used anonymously, LINE is becoming more and more popular in the crypto community again.

Trends

Similar to global trends, DeFi became a major movement in 2020, but the number of users who were actually earning money from the DeFi ecosystem is extremely limited, and most users in the community are only trading DeFi tokens on exchanges. Many of the users are looking for altcoins with better ROI than Bitcoin, and have formed large communities, including Ethereum, Ripple and NEM. Recently, cross-chain projects, such as Polkadot and Avalanche, DeFi-related projects such as Uniswap, Yearn, and Curve, and whitelist currencies with low unit prices such as IOST have been very popular, but there has been a lot of criticism of such whitelist stocks, as Pump.
There is also a growing number of domestic blockchain games, such as My Crypto Heros and CRYPO SPELLS. NFT (Non-Fungible-Token) is also one of the most popular areas, because of the large number of influential IP (Intellectual-Property) in Japan. Unlike DeFi, NFT is characterized by the fact that many users themselves are actually playing blockchain games. The most popular NFT-related projects are ETH, ENJ, and FLOW.

To summarize :

• New altcoin listings restarted, and altcoin investments have been revitalized.
• Influencers have a lot of influence, but they basically do not do PR.
• DeFi, Cross-chain, and NFT are likely to be the focus areas in 2021.

The links below provide an overview of market trends in China and Korea, as well as information on cryptomedia in English-speaking countries.
https://fareastblockchain.com/en/trend/

*1 Crypto asset enchange licencee list (https://www.fsa.go.jp/menkyo/menkyoj/kasoutuka.pdf)
*2 Coincheck: World’s biggest ever digital currency ‘theft’ (https://www.bbc.com/news/world-asia-42845505)
*3 Japan’s Financial Watchdog to Set Low Leverage Cap for Crypto Margin Traders: Report (https://www.coindesk.com/japans-financial-watchdog-to-set-low-leverage-cap-for-crypto-margin-traders-report)
*4 Financial Literacy Survey 2019 (https://www.shiruporuto.jp/public/document/container/literacy_chosa/2019/)

In this article, we would like to share some simple insights to help you better understand each of the mentioned markets.
First of all, on a very basic level, these three countries, which are often equated by the Western world, have very different linguistic and cultural backgrounds, and fundamentally there is no common trend in terms of projects, services, regulations, or communities surrounding the crypto industry, and each is developing in its own way.

In the previous article, we took a look at the crypto market in China. Let’s take a look at Korea this time!

Market Environment

In South Korea, the entire country is actively engaged in research and development of blockchain technology, including the South Korean government*1, the Seoul municipal government*2, and large corporations including the major internet company Kakao*3. On the investment front, the crypto currency bubble and ICO boom of 2017 made crypto currency investment very popular, but the overheating has now subsided due to rampant fraud and the crypto currency Youtubers getting flamed. At the same time, regulations are being put in place, and in the process, the weeding out of previously numerous media, community, and other related businesses is taking place, and the industry is becoming healthier.

Habits

As it relates to crypto currencies, South Koreans are often referred to as a nation that is easily heated and cooled. A symbolic example is the previous “kimchi premium” phenomenon*4. The kimchi premium refers to the price formation that occurs when bitcoin buying demand heats up in the South Korean market, causing the bitcoin price in South Korea to be higher than the global price. During the most active period of bitcoin buying in late 2017, a “kimchi premium” of up to 20% was generated.

Media

A special emphasis in Korea should be placed on community websites. The big ones are Coinpan and Cobak, but there are also several very large community sites on Naver Cafe, a community platform run by the major search site Naver. There are also several very large community sites on Naver Cafe, a community platform run by Naver, a major search site. They prefer to casually exchange information on the bulletin boards of these sites. For new information, they first exchange a number of short, casual posts, and then engage in more in-depth discussions on topics of interest.
TOKENPOST, BLOCKMEDIA, and Blockinpress have been in operation and influential since the early days of crypto currency. However, with the excitement of 2017, followed by two years of market stagnation, and further regulatory developments in the industry, the media has been switching from old to new ones. In particular, being indexed on Naver now has a significant impact on traffic. Due to regulations by the authorities, the expression of content is also strictly regulated and requires to be cautious.
As for messenger applications, Kakao Talk is the most popular and is the base for information exchange. Telegram is also commonly used by more literate users.

Influencers

In South Korea, Youtubers used to be the most popular influencers and had a real power, but they have been losing influence since 2018 when Spunky, a prominent Youtuber, came under fire for introducing the Scam project and getting paid for it (Spunky was later also attacked in person). These days, bloggers are more influential, and they distribute the information through Naver Blog and some Telegram groups.

Trends

The popularity of investing in altcoins other than Bitcoin and Ethereum is a feature of South Korea. They seek out promising, small projects that have not yet received much attention and aim for high returns. Token airdrops (Free token distribution), which are often conducted when a new project is launched, are also popular. Many people look for airdrop information on a regular basis, and it is not uncommon to receive hundreds of applications in a few days.
AMA (Ask Me Anything) events held online are also popular. The weekly AMAs held on Bananatok, a popular blockchain technology-based social media platform in Korea, have grown into an active community of tens of thousands of people, with airdrops taking place every week.

Funds and Projects

There is also a lot of crypto investment by institutional investors, including #HASHED, Unblock Ventures, a subsidiary of the Japanese company LINE, and Kakao Ventures, a subsidiary of Kakao. In particular, #HASHED, which also has a base in San Francisco, has invested in a number of big projects including Ethereum, EOS, and COSMOS, and has a strong presence around the world.
Projects from Korea with a global presence are also popular, including Klaytn, a public blockchain launched by Kakao subsidiary GroundX, and ICON, a smart contract platform called the Korean version of Ethereum. Those are typical examples, and they have received investments from major global funds, especially Korean funds.

To summarize :

• The market is getting healthier after the bubble, regulations are being improved, and the full-scale adoption of crypto currencies and blockchain is progressing.
• Channel selection and communication methods must be tailored to the Korean national character.
• Some projects and funds have a global presence, and the community is watching them closely.

The links below provide an overview of market trends in China and Korea, as well as information on cryptomedia in English-speaking countries.
https://fareastblockchain.com/en/trend/

*1 블록체인 기반 온라인 투표 시스템 나온다 (https://v.kakao.com/v/20200624165519865)
*2 서울시 11월 블록체인 행정서비스 도입 준비 ‘착착’ (https://blockinpress.com/archives/20618)
*3 Korean internet giant Kakao is launching a blockchain company (https://techcrunch.com/2018/03/05/korean-internet-giant-kakao-is-launching-a-blockchain-company/)
*4 Kimchi Premium (https://www.investopedia.com/terms/k/kimchi-premium.asp)

In this article, we would like to share some simple insights to help you better understand each of the mentioned markets.
First of all, on a very basic level, these three countries, which are often equated by the Western world, have very different linguistic and cultural backgrounds, and fundamentally there is no common trend in terms of projects, services, regulations, or communities surrounding the crypto industry, and each is developing in its own way.

Market Environment

First, let’s look at China. Alibaba holds the world’s largest number of patents related to blockchain technology*1, and there are also high quality global-level researches and development in blockchain technology, as well as virtual currencies. It also boasts an overwhelming number of projects*2, products, media, platforms, and other services. Therefore, in marketing, it is essential to choose what to use and how to use it among the overflow of information and resources.

Habits

People in China are particularly mobile-friendly among Asian countries, and they actively use social media against a backdrop of mistrust of traditional media due to strict information control. In addition, they have very strong kinship ties and are wary of people who are not family members or close friends, which is one of the reasons why social media is so influential as a source of viral content based on individual relationships.

Media

There are many general portal sites in China, and the number of blockchain and virtual currency media is overwhelming, compared to other countries. Each media outlet has its own political stance as well as the characteristics of the information it deals with, so it is necessary to choose carefully, when using the media for promotion, taking into account the nature of the information to be introduced.

Regarding the crypto community in particular, they have formed a diverse communities on WeChat. It is similar to the situation with numerous crypto communities on Telegram, but since WeChat has a limit of 500 people per group, there are countless smaller and more fragmented communities. Among them, there are community leaders who manage multiple communities and they have a certain amount of influence.

Weibo is a service similar to Twitter. It is popular among the global crypto community, its users are relatively young, and the information they share is more casual than financial or business-related. Weibo is not often used as a main source of crypto-related information. In the past, when ICOs were popular on Wechat and Weibo, groups that dealt with crypto-related information were banned by the authorities. In the past, Wechat and Weibo were used by the authorities to ban groups that dealt with crypto-related information*3.

Community platforms, such as 链节点*4  run by major media companies are also popular. The community platform is not only a forum like Reddit or Bitcointalk, but also a huge community platform that offers events, Q&A, basic knowledge about blockchain, and professional tutorials. There are many such platforms in addition to 链节点, and through these communities, people can discuss and interact with each other while learning the right knowledge about blockchain, contributing to raising the level of knowledge and education in the industry to a higher level.

Trends

In China, likely to the trend in the global community, Bitcoin and Ethereum, as the major projects, are highly popular. PoW currencies are especially popular as China has a pioneering position in the mining space globally. Projects from China such as EOS, TRON, VeChain and tokens based on them are also popular. In addition, Polkadot is extremely popular these days, and there will be a great deal of interest in projects launched on Polkadot in the future. China is also home to a number of world-famous funds specializing in crypto, such as Node capital, Fenbushi capital, and FBG capital, so the investment trends, set by such funds is also under the focus. The projects that the funds are paying attention to and investing in tend to get more attention from the community as well.
DeFi has experienced a global boom in 2020, and China is no exception, and is expected to continue to attract attention in 2021. In 2021, the cross-chain space will also be a major theme to watch.

To summarize :

• Social media and word-of-mouth are the main sources of information in China.
• It is important to understand the market, select the right channels, and use methods that will active the word-of-mouth about the project.
• There are issues, needed to be taken into account, that are unique to the Chinese market, such as regulations and politics.

The links below provide an overview of market trends in China and Korea, as well as information on cryptomedia in English-speaking countries.
https://fareastblockchain.com/en/trend/

*1 The Current State of Blockchain Patents (https://kisspatent.com/blockchain-patents-study)
*2 Nation leads world in blockchain projects (http://www.china.org.cn/business/2019-04/02/content_74636929.htm)
*3 腾讯回应多个区块链公号被封：涉嫌发布ICO等炒币信息，永久封停 (http://news.china.com.cn/2018-08/22/content_59655824.htm)
*4 链节点 (https://www.chainnode.com/)