Last summer, Rakuten announced its acquisition of Everybody’s Bitcoin Inc., a cryptocurrency exchange that was then unlicensed and had come under scrutiny as Japan was tightening its regulations in the sector. Rakuten and Everybody’s Bitcoin agreed on a share transfer that would give the former 100 percent of the latter for about $2.4 million.
At the time, Rakuten explained the move as an effort to serve the customers of its online trading offshoot, Rakuten Securities.
“A growing number of customers, in particular foreign exchange customers, of Rakuten Securities, the securities company of Rakuten Group, have been calling for the provision of a cryptocurrency exchange service, which is also part of the background of the Rakuten Group considering entry into the cryptocurrency exchange industry,” per the announcement. “Rakuten Group decided to acquire everybody’s bitcoin shares so that it can realize the early registration as a cryptocurrency exchange and develop cryptocurrency services to customers by combining the know-how of everybody’s bitcoin as a cryptocurrency exchange, and the know-how of Rakuten Group as a provider of various financial services.”
The announcement also noted that Everybody’s Bitcoin was losing hundreds of thousands of dollars at the time.
Introducing Rakuten Wallet
Rakuten officially announced regulatory approval for the acquired exchange, rebranded as Rakuten Wallet, on March 26, 2019. It submitted an application to serve as a virtual currency exchange service provider to the Kanto Local Finance Bureau under Japan’s Payment Services Act and, following a business improvement order, is now registered.
“In response to a business improvement order … the company has officially restructured its management system, including formulating a business improvement plan and strengthening its business management and internal control systems,” according to the company announcement. “As a virtual currency exchange provider, Rakuten Wallet will support sound development of the industry, and provide a safe and trustworthy user experience by further strengthening its security and service offerings.”
The new exchange may be wholly different from Everybody’s Bitcoin in user experience, security, compliance and any number of additional factors. In this way, it may be the perfect microcosm for what happens when an institutional player enters the cryptocurrency space.
What Rakuten Means for the Crypto
This approval to relaunch the exchange is just the most recent development in Rakuten’s efforts to establish itself in the crypto industry.
The company started accepting bitcoin payments in 2015. It announced plans to unleash its own cryptocurrency, Rakuten Coin, last year.
Now that it has officially announced regulatory approval for Rakuten Wallet, the company may be the largest e-commerce entity with the most eggs in the crypto basket, so to speak. The announcement certainly tightens its rivalry with Overtsock and its blockchain subsidiaries Medici Ventures and tZero for this mantle.
And based on its efforts to rehab Everybody’s Bitcoin, work through Japan’s increasingly strict crypto oversight and embed institutional trust and safety into its new brand name exchange, Rakuten may also add appeal for potential mainstream adopters who have shied away from the crypto space. Beyond any specific new product or experiment, this formal and enterprise-level approach may be what makes the difference for the crypto space as a whole.