Japan was a digital-currency pioneer. People in Japan have been using contactless mobile payments by phone since 2004 when NTT DoCoMo introduced its “wallet-phone” technology, and 33% of mobile users used their phones to make payments in 2011 according to a study by Accenture.
While many parts of the world have caught up to Japan in the digital-currency space, Japan is now looking to pioneer another type of currency: virtual currency.
In April, the Japanese government revised the Payment Services Act to recognize bitcoin as legal tender. In addition, Japan’s Financial Services Agency officially endorsed 11 cryptocurrency exchanges and approved 17 cryptocurrencies to be traded on these exchanges in September.
Tokyo may no longer be the world’s financial center for traditional currency like it was in the 1980s, but these legal changes have made it the world’s financial center for virtual currency.
CHINA’S LARGEST CRYPTOCURRENCY OPERATORS ARE MOVING TO JAPAN
Foreign companies are looking to take advantage of these changes. After bans on exchanges and initial coin offerings in China, at least 19 Chinese exchanges and wallet services are applying for licenses or looking to form partnerships in the cryptocurrency safe haven of Japan.
JAPANESE IT ENGINEERS AND PROGRAMMERS CHOOSE GAMING OVER FINTECH
While regulations and foreign investment are in place for a strong cryptocurrency industry, companies are struggling to find talent.
Kazuhisa Shibayama, founder and chief executive of robo-advisor WealthNavi, told the Financial Times (subscription required) that, while new enthusiasm for financial technologies (fintech) has led to increased interest from venture capital firms, new fintech companies are struggling to attract talent because young Japanese people prefer established companies over startups. Furthermore, Japan’s healthy gaming industry attracts many of Japan’s IT engineers and programmers.
A STRUGGLE TO FIND EXPERTS
Large financial firms and small startups both have struggled to recruit experts to manage the blockchain technology that underlies virtual currency. The problem is so severe that blockchain positions attract two qualified candidates compared to 10 for other software positions. In a rare move, large Japanese banks are even partnering with startups to find talent. Organizations like the Blockchain Collaborative Consortium are holding seminars on blockchain technology, but it will likely take years for a steady supply of skilled engineers.
OPPORTUNITIES FOR OVERSEAS TALENTS
While governmental support and the influx of international companies make Tokyo the world’s new financial center for virtual currency, a lack of homegrown talent means fintech companies in Japan must consider international workers with a strong knowledge of blockchain and other technologies when filling available roles. Overseas IT workers looking to work in Japan would be wise to focus their studies on blockchain, bitcoin, and other fintech technology.
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Also published on Medium.