Business / Corporate

Japan crypto-exchange license approval nears for Line

Bloomberg

Line Corp., the nation’s largest messaging app, is close to obtaining a license to launch a cryptocurrency exchange in Japan, according to people familiar with the matter.

The Financial Services Agency could issue the license as early as this month, with exchange operations starting a few weeks after that, said the people, asking not to be identified discussing private matters. The service, which will be called BitMax, will allow Line’s 80 million users in Japan to buy and sell cryptocurrencies including bitcoin and Line’s own token, Link, one of the people said.

Line joins a crowded field of tech companies racing to roll out cryptocurrency products, including a move from Facebook Inc. earlier this week to create its own financial system with Visa Inc. and Uber Technologies Inc. For Line the pressure to succeed is particularly acute, as stagnant user growth has pushed shares to their lowest since listing in 2016. The company booked a loss last fiscal year as it stepped up investments into new businesses to reduce its reliance on advertising revenue.

Line spokeswoman Icho Saito declined to comment.

BitMax will use the same back-end technology as BitBox, a Singapore-based crypto-exchange that Line launched last year for global users, according to one person. BitBox is off limits to users in Japan because of the licensing issue, and so far has not delivered a big boost to the company’s earnings. Exchange volume over the past 24 hours was about $2 million, according to its website.

Line is still awaiting a separate banking license in Japan that will allow deeper integration of cryptocurrencies with its other services like online shopping. That license is unlikely to be issued until next year, according to one person. Line aims to debut stock brokerage operations this year with Nomura Holdings Inc. and banking services next year with Mizuho Financial Group Inc., co-Chief Executive Officer Shin Jung-ho said this month.

Facebook announced this week its plans for Libra, a so-called stablecoin that is expected to let users send and receive money, shop online and invest through the social media platform. In Japan, tech companies including Rakuten Inc. and Yahoo Japan Corp. have launched their own crypto-exchanges this year after receiving licenses from the FSA.

The growing adoption of cryptocurrencies by large companies is contributing to a rebound in prices this year, with bitcoin more than doubling over the past three months. Line’s Link has almost doubled in June alone, giving it a market valuation of about $30 million. It’s one of the few cryptocurrencies in the world that is issued by a large, listed company.