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Sony has joined a growing list of Japanese companies exploring blockchain technology as Japan’s crypto market begins to recover.
The company’s latest move shows the ongoing tension between innovation and regulation in the country’s digital asset space.
Sony is the latest to jump onto a bandwagon of Japanese businesses tapping blockchain technology, a trend that poses challenges for the government https://t.co/oiUfSQEqcA
— Bloomberg (@business) September 17, 2024
Sony’s Blockchain Push
Sony’s venture into blockchain is evident with its recent launch of Soneium, a digital ledger that aims to integrate blockchain into various entertainment sectors, such as gaming, music, and movies.
Though the exact applications are still being explored, Jun Watanabe, chairman of Sony Block Solutions Labs, believes that “entertainment-related businesses operating on a web3 platform will continue to expand in the future.”
The company’s ambitions align with those of other Japanese corporations, such as Nippon Telegraph & Telephone Corp., Toyota Motor Corp., and Mitsubishi UFJ Financial Group Inc.
Mitsubishi UFJ Financial Group Inc. is considering issuing stablecoins. As more companies explore blockchain, it raises questions about whether the Japanese government will respond to industry demands for looser regulations.
Japan’s Crypto Market Recovery
Despite strict regulatory frameworks in place, Japan is seeing renewed interest in blockchain and cryptocurrencies. The government has been cautious, aiming to protect investors after several high-profile crypto collapses, such as the 2014 Mt. Gox hack and the recent $320 million breach of DMM Bitcoin.
While the crypto industry pushes for less restrictive rules, the government remains hesitant to reduce regulations.
Notably, Japan’s digital asset market is bouncing back from a slump, with trading activity on exchanges rising. Monthly volumes have grown from $6.2 billion in 2023 to almost $10 billion.
This surge is largely driven by a Bitcoin rally and increasing business interest. Japan’s strict regulations have long frustrated companies looking to expand their operations in the country.
For instance, due to the regulatory environment, Amber Group, a Singapore-based crypto lender, sold its Japanese digital-asset trading platform to Sony.
ICYMI📢:
After acquiring Singapore's Market Maker (Amber Japan) in 2023, #SONY is now set to launch its #Bitcoin and crypto exchange.
This is going to bring significant changes to the crypto and #Web3 industry. pic.twitter.com/AZaP7SRlZA
— Huostarter (@Huostarter) July 2, 2024
While Japan has implemented stablecoin regulations and a framework for crypto exchanges, the tax system remains a significant burden. Taxes on crypto profits can reach up to 55%, compared to 20% for traditional investments.
Prime Minister Fumio Kishida has been a key proponent of web3, a decentralized vision of the internet built around blockchain. Under his leadership, regulators have made listing digital tokens on exchanges easier.
However, as his tenure nears its end, it remains unclear if any hopefuls vying for the prime ministerial seat will continue championing web3.
