For most Japanese investors whose experience of a highly Tokyo-centric, conservative market renders them prudent and considered in financial markets related matters, the mere mention of Bitcoin conjures up images of the failed MtGox virtual currency exchange which cost its customers a fortune to the tune of $473 million in lost Bitcoins.
Whilst the rest of the world has spent most of 2014 undergoing a change in perspective from extreme skepticism to wholesale acceptance of Bitcoin, with Switzerland, the United States, Israel and the United Kingdom having embraced virtual currency and the technology behind it as a vital development in the financial ecosystem, Japanese lawmakers and government officials continue to lick the wounds left by MtGox almost a year ago.
Faced with the challenge of rectifying a faltering economy, Japan’s prime minister Shinzo Abe has to find ways of cultivating new business, which is where maverick technology proponent Minyuki Fukuda comes in.
Mr. Fukuda is vehemently pro-Bitcoin, and has been able to rally programmers, merchant service providers and traders in order to research the technical topography of Bitcoin and then use his political influence to push the entire industry to come up with its own rules and then enforce these rules rather than encouraging a reluctant government to design Bitcoin regulations.
Government lawmaker and potential Liberal Democrat candidate for election Mineyuki Fukuda sat at a table at a Chinese restaurant in Tokyo’s Capitol Hill where he held discussions with a series of technology experts recently, where he revealed to the technology experts that he is part of a subcommittee which oversees electronic payment systems and that he has personally become in charge of Japan’s policy relating to Bitcoin.
According to a report by Bloomberg today, Mr. Fukuda explained to the technology experts that many Japanese lawmakers had not heard of Bitcoin, and when enlightened, showed their concern and were at a loss as to who should regulate it.
“The finance ministry didn’t want to deal with it. Neither did the trade ministry,” said the 50-year-old politician, “It fell to me” he said.
“To me, Bitcoin isn’t just a form of money,” Mr. Fukuda told the room. “What I’m really interested in is the future of blockchain.”
“Indeed, indeed,” came the response from around the table.
“Take, for example, the process of registering property titles,” Mr. Fukuda continued. “Right now the government has to keep records. If blockchain were used, everyone would know who owns what and the government wouldn’t have to be involved.”
The report continued to detail that one of the diners kept trying to steer the conversation into the realm of central bank conspiracy theories, a favorite topic among Bitcoin’s early adopters.
They had each contributed a minimum of 10,000 yen, or about $84, to fund Mr. Fukuda’s trip to the U.S., where he met with the U.S. Treasury’s Financial Crimes Enforcement Network and some bitcoin entrepreneurs.
Mr Fukuda’s party didn’t cover his expenses because he’d already used up his travel budget. The main message the lawmaker brought home: “Everyone said they wished the U.S. was doing it the Japanese way.”
The conversation steered in the direction of how to ensure safety of Bitcoin, a matter that the Japanese government will undoubtedly not leave open, especially following the security failings that caused the downfall of MtGox, therefore storage on an offline ‘cold wallet’ is likely to be an almost mandatory part of the rulings.
Mr. Fukuda concluded the evening by reminding his guests that before he can do more to advocate bitcoin, he has to win the general election which is scheduled for December 14 this year.
Wanting to do his part, one of the donors whipped out his smartphone to make a campaign contribution in bitcoin right there on the spot. In theory, it would have taken just a few seconds to scan a QR code and wire the funds.
Japan’s chief government authority on the digital currency grew flustered as he fumbled with his handset. “This doesn’t have my bitcoin account on it,” he said. “It’s on my other phone.”
What’s next? Roving virtual currency profiles? Cue the venture capital investors…..