As Japan becomes one of the cryptocurrency capitals of the world, virtual currency exchanges in the country are spending big on advertising. In some cases, even more than blue-chip firms in the Asian nation. However, some are of the opinion that these companies should ban related adverts entirely or reduce the rate at which they run commercials due to the volatility of blockchain-based digital assets.
Japanese Media Frenzy
Close to Shibuya crossing in Tokyo, one of the busiest intersections in the world, one can see a massive billboard advert for DMM bitcoin exchange which features a celebrity coated in gold and a bitcoin held next to her cheek.
(Source: Japan Times)
As simple as it may be, this kind of advertising can never be displayed in some countries. It may also be a sign of how cryptocurrencies have taken center stage in the Japanese media world and the broader national conversation as well.
A British tourist surprised to see bitcoin ad on a billboard told the Japan Times that:
“When I was in London I would see ads all over Facebook, but never on TV or in the streets like this.”
While the public has been bombarded with virtual currency activity, the exchanges are now facing more pushback on how they promote trading services in highly volatile digital currencies. One Japanese industry group has suggested self-regulation following the Coincheck saga.
A senior researcher in financial technologies at the Mizuho Research Institute, Kenji Harashima, reiterated that:
“Japanese exchanges are the most active in the world. Not only is this the result of tight regulations in China and South Korea, but it is also because you can use leverage to make investment. In 2017, with increasing cryptocurrency asset prices, more people gained an interest in buying, and exchanges began a stronger push in the Japanese media market.”
Exchanges like DMM, bitFlyer, and Coincheck have all placed adverts on social media platforms like Facebook and the rest, as well as on television stations in Japan.
According to CM Soken Consulting, a commercial research firm run by Tokyo Kikaku Co., cryptocurrency exchanges carried out massive advertising campaigns in 2017. The first TV commercial was done by Japan’s largest exchange, bitFlyer, in April, before Coincheck and DMM did theirs in December and January.
The firm noted that from December 20 to January 19, 2018, TV commercials by Coincheck and bitFlyer were aired 819 times in the Kanto region, almost the same as large companies like Toyota Motor Corp., McDonald’s Japan, and NTT Docomo Inc, CM Soken Consulting stated.
The Japan Cryptocurrency Business Association (JCBA), which is a Tokyo-based exchange industry group of which Coincheck is a member, have asked its members to “advertise responsibly.”
A representative of the association said:
“While we recommend that some organizations rethink their advertising strategies, it is difficult for exchanges to make sudden changes as they may be unable to cancel long-term agreements they have already made.”
It remains to be seen if authorities will formulate new guidelines concerning cryptocurrency adverts, but some investors have condemned the way some of these exchanges run their ad campaigns. CEO of SBI Holdings, Yoshitaka Kitao, blasted Coincheck exchange.
Kitau said that “the thing that makes me the most angry is that they spent money on commercials that should have been spent on their systems,” the 30-year-old cryptocurrency and Fintech investor did not hide his displeasure, “These people are the scum of scum.”