Rakuten joins Japan's crypto fray with $2.3M exchange buy

Rakuten joins Japan’s crypto fray with $2.3M exchange buy

In a surprise announcement, ecommerce giant Rakuten said that it had decided to acquire a cryptocurrency exchange in Japan to continue diversifying its interests and thus also entering the crypto space.

The exchange is called Everybody’s Bitcoin Inc. and the transaction will take place through the company’s subsidiary, Rakuten Card Co. Ltd. The stock acquisition is expected to take place on October 1 and will cost around JPY256 million (US$2.3 million).

In a note that was published in the press announcement, Rakuten said the acquisition was boosted by its view that payments in cryptocurrency will continue to grow in the future—not just in e-commerce, but also in offline retail and peer-to-peer payments.

“In order to provide cryptocurrency payment methods smoothly, we believe it is necessary for us to provide a cryptocurrency exchange function, and have been considering entry into the cryptocurrency exchange industry as the Rakuten Group,” according to the company.

Rakuten also revealed that several of its foreign exchange and securities customers “have been calling for the provision of a cryptocurrency exchange service.”

Rakuten, founded in 1997, boasts of having over 1.2 billion members around the world. It operates more than 70 businesses, spread across e-commerce, digital content, communications and fintech.

Rakuten owns the messaging app Viber and has recently invested in the car hailing app service Lyft. The company also established a dedicated research and development unit in Belfast, Northern Ireland, called the Rakuten Blockchain Lab. The company has also entered the telecommunications space, where it has been granted a licence by the Japanese government to operate Japan’s fourth largest wireless carrier.

Everybody’s Bitcoin, also known as Minna no Bitcoin in Japan, began operating as a crypto exchange service on March 30, 2017. It supports BCH-JPY trading, as well as BTC and ETH. The exchange applied for a license on September 7, 2017, but its application remains under review.

The FSA, which has only approved 16 crypto exchanges of late, has allowed companies that were already operating crypto exchanges before the regulation took effect to keep operating while their applications are being reviewed. These companies are referred to as “quasi-operators” of crypto exchanges or “deemed” crypto exchanges.

Everybody’s Bitcoin falls under this category, according to Rakuten.

“Currently, Everybody’s Bitcoin operates the business as a deemed cryptocurrency exchange and is waiting for approval of the official registration. Rakuten Group decided to acquire Everybody’s Bitcoin shares so that it can realize the early registration as a cryptocurrency exchange and develop cryptocurrency services to customers,” the Japanese ecommerce giant said.

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