Japan’s largest Internet company launches cryptocurrency exchange service
There's something to be said for having brand recognition and then launching an exchange rather than vice versa.
Either way, it's undeniably Japan's largest e-commerce site. It boasts over 100 million customers, and it now numbers a cryptocurrency exchange service, Rakuten Wallet, among its dozens of subsidiaries.
It already has a strong blockchain background, acquiring crypto wallet company Bitnet in 2016 and establishing the Rakuten Blockchain Lab in Belfast the same year. Early last year, it announced that it would be launching a cryptocurrency rewards program.
Rakuten Wallet currently offers spot trading of Bitcoin, Ether and Bitcoin Cash and says "there are no fees for opening or managing an account, purchasing or selling crypto assets, or depositing money".
Customers who already have an account with Rakuten Bank will be able to open a Rakuten Wallet account as easily as creating an account online.
It also offers a range of security features, including segregated cold storage for customer funds, multisignature schemes for private keys and mandatory 2-factor authentication for customers when logging in as well as when withdrawing money or crypto assets.
Although largely standard, these are exactly the kinds of features that could have saved some of Japan's other cryptocurrency exchanges from devastating hacks.
For example, Japan's Zaif cryptocurrency exchange lost $60 million when hackers pulled a combination of user funds and exchange funds out of the same overstuffed hot wallet. And in what will hopefully forever remain the world's largest ever cryptocurrency exchange hack, Japan's Coincheck exchange lost the equivalent of over half a billion dollars, which was also pulled entirely from a hot wallet.
The Rakuten Wallet exchange will take the form of an app and will initially be released for Android with an iOS version due for release later. Further announcements of the iOS app release date are expected in September.
Some broad similarities may be seen between Rakuten's decision to launch a cryptocurrency exchange, and Japanese messaging platform Line's decision to do the same with the Bibox exchange. Both companies originated in Japan, and both are characterised by a wide range of financial services and peripheral offerings spread around a core offering and immense user base.
Judging from trade volumes on CoinMarketCap, Bibox has seen a reasonable degree of success. Maybe Rakuten Wallet can do the same.
Disclosure: The author holds BNB and BTC at the time of writing.