Line Corp. said Thursday it will launch an overseas cryptocurrency exchange next month, saying the financial field will play a key role in its growth strategy from now on.
During its annual conference in Chiba Prefecture to unveil new services for its messaging app, the company emphasized the potential for growth offered by so-called financial technologies, or fintech.
Line said it will start an exchange called Bitbox that will provide a global cryptocurrency trade service, with Japan and U.S. markets excluded for regulatory reasons. It plans to handle more than 30 kinds of cryptocurrencies, including bitcoin.
“The cryptocurrency and blockchain have huge potential. So launching a business at an early stage will lead to growth when the market starts to expand,” Line CEO Takeshi Idezawa said.
Line has been applying for registration as a cryptocurrency exchange in Japan. A legal revision in April last year requires those wishing to run such exchanges to get approval from the Financial Services Agency.
As for the outlook on approval, Idezawa declined to comment.
In January, Line established Line Financial Corp. as a wholly owned subsidiary to strengthen its finance-related businesses.
It says fintech can make financial services more convenient for people to use and plans to integrate such services into its messaging app, which has a user base of 75 million people in Japan.
“We think this field has a lot of room for redesign,” said Idezawa. The financial sector is not easy for internet firms and startups to enter because of the strict regulations and massive capital needed to operate.
“In that sense, we can say that users are left with existing, inconvenient services,” he said.
A pillar of the Line’s financial business is called Line Pay, a mobile e-money system Idezawa said the company is putting its utmost efforts into. Line Pay allows people to transfer money with each other in a manner similar to the way they send messages, and make payments at stores through QR codes.
Line said it will actively promote the concept of a cashless and walletless society in Japan where dependence on cash is still high.
Small stores are often hesitant to accept cashless payments due to installation costs needed for processing credit card and smartphone payments. The commission fees are unpopular as well.
Aiming to increase the number of participating stores to 1 million this year, Line said it will provide apps compatible with Line Pay to small stores without the installation fee, and with no requirement to pay commissions for three years.
In addition, Line and Nomura Holdings Inc., Japan’s largest securities company, founded a separate firm earlier this month to provide asset management services to Line users.
At the annual event, Idezawa also introduced a new business vision called Line Token Economy that will be based on the blockchain, the technology underlying cryptocurrencies.
Blockchain technology is said to be immune from data falsification with complete traceability. It is used as the backbone system for cryptocurrencies. Many believe it can be applied to other record-keeping tasks as well, including industrial quality tests and government management of citizen data.
Idezawa said Line’s services, including game, e-commerce and media, are expected to be part of this blockchain ecosystem in the future. He also said Line is creating research and development bodies for the Line Token Economy.
Other announcements at the event included a travel agency-like service in which people can plans tours and make reservations.
Line had 165 million monthly active users in Thailand, Taiwan, Indonesia and Japan in the first quarter. Compared with the first quarter of 2017, the number of users in Japan rose to 75 million from 68 million, but Line lost 13 million users overseas.