Fintech

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Blockchain Banking In Japan 2020

Blockchain refers to an expanding list of blocks where each one contains records. They are secured and linked to each other using cryptography. Within each block, you will find at the most basic level a hash of the previous block, timestamp, and the transaction data.

The origins of the blockchain technology are mysterious. Legend has it that Satoshi Nakamoto wrote the bitcoin white paper, developed bitcoin, and was behind the implementation and deployment of the original bitcoin.

The largest bank in Japan wants to switch to blockchain payments in 2020. This is an aggressive move and schedule as well. If successful Japan will find itself well ahead of other nations in terms of security and digital payments.

Japanese traders dominate Bitcoin

Japanese men in their 30s and 40s are the biggest drivers of the bitcoin boom. 

Forty percent of bitcoin trading between October and November was conducted in yen, according to a Nikkei report.

Japanese investors, mostly men, came to dominate trading after regulators started to shut down cryptocurrency exchanges in China.

"More than a few Japanese investors positively value volatility," Muraki [of Deutsche Bank] said in a note on Thursday. He continued: "Japan’s investment style is typified by a combination of low-risk, low-return deposits and high-risk, high-return investments."

Many Japanese investors are engaged in leveraged trading, using borrowed funds. 

Japan's banks are downsizing

Japan’s biggest banks are racing to adapt to changing business conditions amid the shrinking population and spread of online banking.

Many have laid out plans to downsize their workforce and massive network of branches while investing in “fintech”—technological innovation in the financial sector—to streamline their operations and make banking more convenient for their customers.

Mitsubishi UFJ plans to trim 6,000 jobs from the unit’s domestic workforce of 40,000 by the end of fiscal year 2023.

Group CEO Nobuyuki Hirano said he does not foresee layoffs but instead plans to do this “organically” by keeping the number of new hires down as staff taken on in bulk in the run-up to and during the late-1980s asset bubble economy gradually reach the age of retirement.

Japan to promote fintech culture

Japan's push to attract innovative financial technology (fintech) startups to the country could spell trouble for the US.

On Wednesday at the New York Stock Exchange, Japanese Prime Minister Shinzo Abe said the government was moving forward with a plan to roll back regulations on some fintech startups to help spur the development of emerging technology and drive growth in the country.

As such, Abe is pushing for a regulatory sandbox program that would allow fintechs, startups looking to automate or digitize aspects of financial services, to operate and scale without meeting existing regulations.

"We will make a sandbox in which it is possible for certain participants to conduct trial and error freely on new business for a certain period of time without conforming to existing regulations," Abe said.

Bitcoin shoots past $1,800

Bitcoin is trading at another record high on Thursday. The cryptocurrency is up 4.59% at $1853.55 a coin after Ulmart, Russia's largest online retailer, said it would begin accepting bitcoin, Cryptocoin News says. 

The announcement from Ulmart comes despite Russia's central bank saying it would wait until 2018 to consider allowing the use of bitcoin and other cryptocurrencies. At the beginning of April, Japan's regulators announced bitcoin is now a legal payment method in the country.

Robo-advisors gaining popularity

The majority of affluent and high-net-worth individuals recognize the potential of robo-advisors and automated investment services to add value to their wealth management services.

[According to a study of 600 investors in the UK and US] more than 70% of overall respondents think that such tools can positively influence their wealth manager’s advice and decision-making process and that automated advice potentially speeds up onboarding processes such as registration and account opening, making these processes more efficient and convenient. This underlines how the young and the wealthy are especially showing a great openness, awareness and knowledge about robo advice.