The Financial Services Agency (FSA) of Japan has published the number of consultations it received from consumers in the final quarter of 2018, showing a drop in the number of inquiries for virtual currencies.
The consultations the FSA receives range in their scope from complaints, advice, dispute resolution, and general inquiries. During the fourth quarter of 2018, the number of consultations regarding cryptocurrencies and related fields was 788, 443 less than the previous quarter.
During the previous quarter, from July 1, 2018, until September 30, 2018, consultations regarding cryptocurrencies and related fields was 1,231, which was also a quarter-on-quarter drop of 371 cases.
The segment to receive the highest number of consultations was deposits, loans and similar fields, which attracted 2,874 inquiries during the quarter. This is slightly up from the previous quarter. Investment products were the second highest segment in demand, with 2,264 consultations, up by 248 from the third quarter of 2018.
Is Crypto Curiosity Waning in Japan?
There are a number of ways you can look at the dwindling numbers of cryptocurrency consultations to the FSA. One take could be that investors are no longer as interested in trading or investing in cryptocurrencies in the country.
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This would be in line with the current market trend, as although the crypto industry started strong in 2018, the value of digital currencies has diminished dramatically. With the onset of the bear market, some traders have been looking elsewhere, including back to more traditional assets such as gold.
Furthermore, cryptocurrency-focused companies and exchanges have also fallen on hard times because of the drop in demand. In Japan, large financial firms have been exiting the cryptocurrency industry.
As Finance Magnates reported, towards the end of last year and the beginning of 2019, two big players in Japan announced they were pulling out of the crypto mining industry. These companies are none other than GMO internet and DMM.com.
However, another way to look at the FSA figures is that there are fewer complaints and Japanese consumers are more confident with the cryptocurrency industry. Although Japan has lost two of its biggest players in the mining industry, that doesn’t mean the market is dying.
In fact, in December of last year, the FSA revealed that demand for access to Japan’s cryptocurrency market is on the rise, with more than 190 cryptocurrency firms currently trying to enter the Japanese crypto space.
This is an increase of 30 companies from when the regulator previously revealed the count in August, which at the time, included 160 operators.