Make Way for Japan's First Cryptocurrency Fund

Fisco, the reputable Japanese financial information service covering multiple sectors of the market in Japan and beyond, is set to launch the country’s first cryptocurrency investment fund at the end of January. Nikkei reports that Fisco will invest its own money, in addition to raising capital from two unnamed fintech companies.  

The fund, which is expected to launch at over 300 million yen ($2.66 million), will invest directly in multiple cryptocurrencies, including bitcoin. It will seek additional profits by exploiting price differentials in domestic and foreign cryptocurrency exchanges, and hopes to offer 20% annual returns.

Fisco was an early believer in cryptocurrencies’ potential, offering research and information before other similar outlets, but their approach is not limited to providing data. They were quick to take advantage of April 2017 legislation recognizing bitcoin as a legal payment method in Japan – Fisco’s cryptocurrency exchange unit issued a three-year, 200 bitcoin-denominated bond in August (worth $800,000 at the time) to another group company. The deal, thought to be the first of its kind in Japan, was revealed by chief product officer Masayuki Tashiro to be an exploratory transaction, investigating bitcoin bonds’ potential as a fundraising tool.  “We expect that bitcoin will eventually be recognized as a financial product,” said Tasahiro in August. “…if we play a role of arranger, we could earn fees.”

Bitcoin stands to expand Fisco’s business, but they are hardly the only Japanese company bullish on cryptocurrency. MUFG, Japan’s largest financial institution, is set to launch a service in April securing bitcoin adopters against “any operator-based incident leading to losses” on cryptocurrency exchanges. Traders will opt-in to the service while trading at exchanges, and MUFG’s trust bank, Mitsubishi UFJ Trust, will scrutinize pending transactions for suspicious activity. The bank will guarantee the security of bitcoin holders’ assets in the event of any catastrophe – they have already applied for applicable patents. The launch timeline hinges on Japan’s Financial Services Agency recognizing cryptocurrencies as assets that can be secured in a trust, like securities and real estate, but the company is confident that will happen soon.

Japan has long innovated in other technological fields, and cryptocurrency appears to be the newest frontier. As regulatory bodies around the world play catch-up to crypto’s rapid advances, Japan stands to take their usual place as a leading light in the sector’s evolution.