With the use of virtual currency spreading especially overseas, more retailers in Japan are opening up to payments from tourists via the blockchain technology.
Electronics retailer Bic Camera Inc. announced Wednesday its outlets will start accepting payments by bitcoin for purchases of up to ¥100,000 on a trial basis at its flagship store in Tokyo’s Yurakucho district and Bicqlo Bic Camera in Shinjuku from Friday.
The company said it is introducing the new payment option, which it claims is a first for a major retailer in the nation, out of the belief that the use of the virtual currency will become more common among domestic consumers. It also said the move would attract more foreign tourists to use the cryptocurrency.
Introduced in 2009, bitcoin has become one of the most widely used digital currencies, with about 20 million users worldwide as of March, according to bitFlyer, a major domestic bitcoin exchange operator. The company is working with Bic Camera to set up the payment system at the stores. There are about 600,000 users in Japan, it said.
As of December 2016, payment by bitcoin was accepted at 4,500 domestic outlets, including bars, cafes and even sushi restaurants, according to Coincheck Inc., another major bitcoin exchange in Japan.
The use of the virtual currency in Japan is expected to increase this year, said Kazuyuki Shiba, a Principal Economist at the Institute for International Monetary Affairs.
Shiba said China at one time accounted for more than 90 percent of bitcoin trading. That is because investors there bought up the currency to avoid losses from a weakening yuan and the faking of transactions by Chinese exchanges to increase volume, making transactions on the exchanges more attractive.
But the situation changed in January when the Chinese monetary authority tightened its control over bitcoin exchanges, boosting the use of Japanese yen in trades, he added.
The government has also been paving the way for the wider use of digital currencies. Lawmakers revised a law on fund settlements, which set rules on virtual currencies after recognizing they have “asset-like values” and can be used in making digital payments. The changes took effect this month.
Other domestic retailers have embraced the electronic payment option to attract more tourists.
In January, convenience store chain Lawson Inc. started to accept payments via Alipay, an electronic payment platform used widely among Chinese, at some 13,000 outlets in Japan.
Some 52,000 virtual currency payments were recorded during a 13-day period between Jan. 24 and Feb. 5 at 30 percent of all Lawson stores, mainly in popular sightseeing destinations such as Hokkaido, Tokyo, Osaka, Kyoto, Fukuoka and Okinawa, the company said in February.
Using digital currency is convenient for many tourists as they can avoid the burdens associated with currency exchanges, Shiba said, adding that the cost of electric payments is usually cheaper than foreign exchange fees.
But challenges remain before the use of virtual currencies becomes more widely accepted by consumers.
One hindrance to bitcoin’s greater use is highly volatile fluctuations in its spot price. Many consumers will prefer more stable currencies, Shiba said.
Another challenge is how to shake off the negative image associated with bitcoin after the collapse of the Tokyo-based virtual currency exchange Mt. Gox in February 2014, he said.
The company, the largest virtual currency exchange at the time, which once boasted handling around 80 percent of global bitcoin transactions, went bankrupt, wiping out the holdings of its customers.
About $390 million worth of the virtual money disappeared from its computer system, and the firm’s CEO, Mark Karpeles, was arrested in 2015 over the alleged theft of ¥341 million of his clients’ money