Shares of online retailer Rakuten, dubbed the ‘Amazon’ of Japan, are up 10 percent today following the launch of its cryptocurrency wallet platform.
Two days ago on April 15th, Rakuten announced it will begin accepting applications for the new digital wallet and “cryptographic asset trading service”. The press release notes that the product, named Rakuten Wallet, will initially be available to all customers who have an account with Rakuten Bank, the companies own banking and card-issuing service.
Rakuten’s Crypto Interests
In August last year, Rakuten subsidiary Rakuten Card Co. Ltd purchased the Bitcoin exchange ‘Everybody’s Bitcoin’ for a reported 256 million yen ($2.4 million). At the time, Everybody’s Bitcoin was struggling to stay afloat, with losses of almost half a million dollars in the 2017 to 2018 tax year.
Rakuten bought out the company as a means to break into the cryptocurrency exchange industry, saying at the time that it believes “the role of cryptocurrency-based payments in e-commerce, offline retail and in P2P payments will grow in the future.” The acquisition followed an announcement in March that the company was investigating the development of its own cryptocurrency.
However, the acquisition was not the first by the Japanese retail giant. In 2016, Rakuten bought out the assets of Bitcoin wallet startup Bitnet. At the time, Bitnet was hoping to compete with Coinbase and Bitpay but staff losses resulted in the company failing. Rakuten bought out the company with the hopes of developing a blockchain research lab.
Following the recent gains, Rakuten is now worth 1.5 trillion yen ($13.6 billion) and recently gained further value ahead of the IPO of digital scrapbook Pinterest, in which Rakuten owns shares. Last year, Rakuten’s net income rose by 28 percent to 142 billion yen ($1.3 billion).
The growth is indicative of increasing demand amongst Japanese customers to be able to purchase goods using cryptocurrency. Following a number of high profile exchange thefts last year, Japan’s crypto industry took a hard knock. As a result, regulators in the country have begun to crack down on crypto exchanges trading platforms with tougher compliance laws.