In the latest embrace of cryptocurrency exchange by a mainstream company, messaging service Line announced on Thursday its plans for a new cryptocurrency exchange.
The service, which is Japan’s leading chat app, currently sees over 168 million users a month, and is expected to leverage its customer numbers in launching its proposed cryptocurrency exchange.
According to reports, Line has already established a subsidiary, called Line Financial Corporation, to work on the proposals.
“Going forward, Line will use this new company as a base as it proceeds with preparations to provide a variety of financial services, including a place to exchange and transact virtual currencies, loans, and insurance—all from the Line app,” the company stated.
Notably, the company already runs Line Pay, a corresponding payments service that already processes over JPY450 million (USD4.10 million) as of last year. As part of their Line Pay service, the company has secured partnerships with over 30 different banks and financial institutions, giving Line a strong foothold in the financial and banking ecosystems.
While it is not yet clear whether the new exchange business will integrate with Line Pay, some analysts have highlighted the clear opportunities for synergy the exchange business could provide.
According to Japanese regulations, domestic cryptocurrency exchanges now require the approval of the financial regulator before they can open their doors. According to the statement from Line this week, that process is already well underway.
“The application process for registration as a virtual currency exchanger has already been started with the Financial Services Agency, and it is currently under review,” Line stated.
The FSA review process is thought to take an average of around two months, which could see Line gaining approval before the end of March on current timelines—and potentially sooner.
The application comes at a time of intensifying scrutiny of cryptocurrency exchanges in Japan and elsewhere in the world, as regulators and governments look to tighten their grip on cryptocurrency regulation.
Nevertheless, the move has been seen as an attempt to replicate the success of their South Korean rivals, Kakao, which launched Upbit, now the country’s leading cryptocurrency exchange.
It remains to be seen whether the Line offering can win the approval of regulators, and go on to capitalise on their strong reach within the Japanese market.