Japan’s third-largest electricity provider is emerging as one of the first major companies in the world to trial a promising bitcoin payments technology.

Revealed exclusively to CoinDesk, Chubu Electric Power Co. has entered into a proof-of-concept with local bitcoin and Internet of Things (IoT) startup Nayuta, one that finds it exploring how bitcoin payments can be made via the Lightning Network, an in-development protocol that promises to cut costs for bitcoin users.


Boasting 15,000 employees and more than 200 power generation facilities, Chubu is now using Lightning to prototype a new way of letting customers pay to charge an electric vehicle.

In a demo of its work, Chubu and Nayuta went so far as to show how a Lightning payment could be sent to an electric vehicle charger that, once paid, instantly turned on and began to energize a real-life vehicle.

Chubu Electric Power Co. senior manager Hidehiro Ichikawa told CoinDesk that the test is part of the company’s “market research” into how bitcoin could power its IoT needs, though he noted it doesn’t yet have any official plans to accept Lightning payments from customers.

In this way, Chubu’s story resonates with others enchanted by cryptocurrencies but frustrated by their current capabilties. Of note is that Chubu has been experimenting with bitcoin for IoT for quite some time, but faced a wake-up call when it realized its blockchain isn’t as cheap as advertised.

Ichikawa told CoinDesk:

“Since the electricity charge is small, [Lightning’s] necessary to reduce the fees for using public blockchains.”

Nayuta CEO Kenichi Kurimoto believes this test is a signal of something larger – an enterprise interest in using bitcoin to deliver IoT payments in a cost-effective manner with Lightning.

“For IoT and blockchain applications, real-time payments are needed. We showed that second layer payments can be the solution,” he said.

Lightning + electricity = <3

But it wasn’t just Chubu and Nayuta involved in the test.

To show one way Lightning can work for IoT, the two companies hooked up a Lightning node to an electronic vehicle charger and plugged it into a car. From there they also enlisted Japanese software startup Infoteria, which coded up a mobile app to bring the user experience together.

Once clicking the “send” button, the app communicates with the charger over Wi-Fi or Bluetooth, which delivers the message and turns the power on.

You can see how it works in the video from Nayuta below:


Notably, the companies involved didn’t use real bitcoin in the test, as other “reckless” experimenters have been doing recently. Rather, they sent dummy bitcoin on a closed test network that they have more control over.

That detail aside, the test was successful, showing that Lightning can indeed make small, instant payments for electric vehicle charging.

Nayuta spokesperson Hitomi Moriyama went on to say that he believes the same set-up could one day be offered in everyday parking lots. Users could easily use Lightning bitcoin payments to charge up their car, similar to how these chargers are refilled with credit cards today.

“[Lightning] makes it possible to operate a highly reliable charge management system with a small introduction cost,” he said.

Impact and outlook

Still, while the test mirrors those that have happened on other blockchains, this one is perhaps notable given the size and scope of Chubu and the continuing commitment of some of the parties involved.

As Ichikawa stressed, Chubu’s experiment is still an early proof-of-concept, and he was short on details about how it might affect the company’s product as well as how much money it is even pouring into the project.

That said, Nayuta plans to continue to dedicate its entire business to continuing the exploration.

“We will continue to develop and experiment to seek for what kind of architecture is the best to apply Lightning Network for IoT,” Moriyama told CoinDesk.

Kurimoto added that Nayuta is now working to ensure compatibility of its software with the three other major Lightning software implementations that are most in use today.

Going forward, Kurimto said he has introduced his team to the Lightning developer mailing list in an effort to work more closely on enterprise applications of the technology.

Electric vehicle dashboard image via Shutterstock

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SBI Holdings, the investment arm of Japanese financial giant SBI Group, has canceled a business partnership with Chinese cryptocurrency exchange Huobi Group.

In an announcement released Friday, SBI Holdings said it has decided to stop capital and business collaboration with Huobi in launching cryptocurrency exchanges in the country.


As reported by CoinDesk, the two firms had first struck the deal in December 2017 in bid to open two cryptocurrency exchanges in Japan – Huobi Japan and SBI Virtual Currency.

The latter exchange had already completed business registration with Japan’s regulator, the Financial Services Agency (FSA), in September 2017. Huobi Group had indicated that the platforms were expected to begin operations this month.

Yet, in the latest announcement, SBI Holdings said it has scrapped its original plan to use Huobi’s technology, know-how and human resources in operating the exchanges, and instead has decided to bring the efforts in-house.

In explaining the reasons for canceling the deal, SBI Holdings said the firm needs a system that incorporates higher levels of security and which can respond promptly to domestic and overseas regulations.

As such, according to the statement, SBI Holdings will now utilize SBI Group’s own resources to build a system with enhanced security and sufficient processing capacity.

The decision comes at a time when the FSA is beefing up its efforts in scrutinizing Japanese exchanges regarding security measures, following the hack of some $530 million-worth of the NEM cryptocurrency from the Coincheck exchange in January.

Just last week, the FSA issued administrative penalties to several domestic platforms deemed reckless by the agency, having allegedly provided insufficient security measures to fully protect investors.

The news also follows a Feb. 28 announcement by SBI, saying it had postponed the live launch of SBI Virtual Currency citing the need for further security enhancements.

At press time, Huobi Group had not responded to CoinDesk’s inquiries for comments on its plan to further pursue the Huobi Japan effort.

Editor’s note: Some of the statements have been translated from Japanese. 

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Finance regulators in Japan have ordered month-long suspensions for two domestic cryptocurrency exchanges.

The Financial Services Agency (FSA) said on Thursday that it has issued business suspension orders to two exchanges – FSHO and Bit Station – effective for one month starting from today.


The FSA mandated that six trading platforms in total must improve their system security measures and submit a written improvement plan by March 22. Those four exchanges are Tech Bureau, GMO CoinMister Exchange as well as Coincheck, the exchange at the center of a recent $500 million heist that sparked the ongoing probe by the agency.

As reported by CoinDesk, the FSA had already stepped in soon after Coincheck reported that $500 million worth of the NEM token had been stolen in January. According to statements at the time, the FSA discovered Coincheck’s internal systems were lacking, including inadequate anti-money laundering measures.

Following its on-site inspection on Coincheck, the financial regulator also expanded its probe to other domestic crypto trading platforms that are yet to be approved by the FSA for inadequate security measures which included the two that are suspended today.

Elsewhere in the announcement, the FSA also established a cryptocurrency exchange industry study group which aims to examine institutional issues regarding cryptocurrency.

According to the agency, members of the study group will come from academic institutions, cryptocurrency exchanges as well as government agencies as observers. The FSA itself will serve as the secretariat, according to statements.

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Sixteen cryptocurrency exchanges in Japan have formed a new self-regulatory organization, an effort that comes in the wake of the $500 million theft in January.

According to a report from Nikkei, the new initiative will see the group of licensed cryptocurrency exchanges, represented by two trade organizations in Japan, working towards rolling out standards in April for the country’s Financial Services Agency (FSA) in an effort to improve security measures among them. The group will also work toward developing standards for activities around initial coin offerings.


The new organization’s formation, the name of which has yet to be determined, came after the two trade groups – the Japan Cryptocurrency Business Association (JCBA) and Japan Blockchain Association (JBA) – reached an agreement last week.

Taizen Okuyama, president of foreign exchange trading firm Money Partners Group and chairman of the JCBA, and Yuzo Kano, CEO of exchange startup bitFlyer and the head of the JBA, will serve as the chairman and vice chairman of the new group, respectively.

The move confirms previous reports about an effort to develop an SRO for Japan’s cryptocurrency exchange ecosystem.

The idea was put forward as a way to shore up public confidence in the wake of a hack that resulted in the theft $500 million worth of the NEM token from Coincheck, one of the Japanese exchanges that have yet to be fully approved by the FSA.

As previously reported, Coincheck hasn’t been approved yet by the financial regulator because of security issues, which the FSA said it had alerted Coincheck about prior to the heist.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in bitFlyer.

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Japan’s financial regulator is mulling the creation of a regulatory framework for companies raising funds through initial coin offerings, a report indicates.

According to Sankei Shimbun, the Financial Service Agency is considering the revision of relevant laws and regulations in an effort to regulate ICOs in Japan, amid the growing popularity of token sale activities within the territory.


The report indicates that Japan currently has no clear regulations covering ICOs specifically, while the existing bitcoin payment law that went into effect last April is not sufficient to define the legal status of some ICO activities.

“There is an increasing demand for amendment of the law, and the FSA is planning to consider suspension of inappropriate ICOs,” the report reads.

The FSA has already started monitoring ICOs that target Japanese investors and are deemed suspicious by the agency.

As reported, the FSA has issued multiple warnings to a Macau-based cryptocurrency firm that solicits interests from residents in Japan and published a formal statement on its website to order a halt to the firm’s operation in the country.

The move towards a potential regulation is also a follow-up to the FSA’s statement in October last year, in which the agency stressed several risk factors of token sales activities with a fund-raising purpose.

Other nations have recently moved to more clearly define ICO tokens, both to protect investors and to bring clarity to the industry.

Just four days ago, Austria announced plans to draw up ICO and cryptocurrency regulations, using existing rules for the trading of gold and derivatives as a model.

And on Feb. 22, Germany’s financial markets regulator issued new guidance on how it will classify ICO tokens, including those it will consider securities.

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Following its notable $530 million hack, Japan’s financial watchdog is reportedly probing into crypto exchange Coincheck’s finances through an on-site inspection.

According to a report from Nikkei, inspectors from the Financial Services Agency (FSA) arrived in Coincheck’s office this morning to examine whether the firm has the financial capability to fulfill its promise that it would compensate users who lost funds in the major breach.


As reported by CoinDesk, Coincheck, one of the biggest cryptocurrency exchanges in Japan, saw 500 million NEM token stolen on Jan. 26, resulting in a loss of $533 million at the time from around 260,000 users.

Following the hack, Coincheck announced on Jan. 27 that it would issue compensation at a rate of $0.81 for each stolen token, which would amount to a total payout of $420 million.

The FSA then stepped in on Jan. 29 and gave an administrative order to Coincheck, requiring the exchange to report by Feb. 13 on its investigation on causes of the hack, as well as its plans for security improvements.

Yet, whether Coincheck is in a position to fulfill its compensation promise has raised questions from FSA. The on-site inspection reported today comes as the first instance in which regulators in Japan have taken oversight over cryptocurrency exchanges to a physical level for investor protection.

As of press time, the agency has yet to release a formal statement regarding the result of its inspection.

Yet, according to another report by Reuters, the FSA said on Friday that it has already ordered Coincheck to fix its security loophole, which was also one reason FSA has yet to approve Coincheck as an exchange.

Financial Services Agency image via Shutterstock.

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Japanese investment research firm and bitcoin exchange operator Fisco has announced that it will launch a cryptocurrency fund.

Coming after the firm issued a bitcoin bond last year, the new crypto fund will invest more than 300 million yen ($2.66 million) in bitcoin and other digital currencies, according to Nikkei.


The report adds that the fund – which could be launched this month – is being claimed as the first of its kind in Japan.

The venture will look to gain profit from price differentials among local and foreign cryptocurrency exchanges. Fisco said that it will invest its own money in the fund and further raise capital from two fintech firms, aiming for investment returns of approximately 20 percent per year, the report indicates.

The corporate analyst company – which launched a bitcoin exchange in August 2016 and has invested in other exchanges such as TechBureau – issued a three-year test bond in August last year, worth 200 bitcoins at the time.

Masayuki Tashiro, Fisco’s chief product officer, told Bloomberg at the time that the issuance could open ways to generate revenue, provided it had government support.

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GMO Internet, a publicly listed IT firm in Japan, has officially launched its cryptocurrency mining operation.

The mining unit was previously unveiled in September, with a goal of going live with it in the first quarter of 2018. GMO has pursued a number of cryptocurrency-related business lines in the past year, including an exchange platform it opened in the spring and a bitcoin-focused payroll service unveiled earlier this month.


According to today’s announcement, the new facility is based in northern Europe. And while the firm declined to name its exact location, GMO indicated that the mine will draw electricity from geothermal and hydropower sources. As reported earlier, the mining facility will be equipped with a computing power at 500 petahashes per second (PH/s).

“The cryptocurrency mining business will use existing technology to mine from facilities (mining centers) in Northern Europe. GMO Internet will increase the size of the operation in phases, expanding the business,” GMO said in its statement.

The announcement also confirms previously suggested plans to develop a cloud mining service, through which it would sell excess hashing power and the associated rewards (when a new block is added to a blockchain by a miner, that miner receives new coins in return) to consumers.

GMO also appears to be taking a bullish approach to its mining business in the long-term.

For example, the publicly traded firm plans to begin upgrading its chips in the first half of next year. Supporting that effort is research into new mining chips being developed with as-yet-to-be-revealed partners.

Pending the outcome of that process, GMO indicated that it would move to begin selling mining hardware.

“After the company has gained a certain level of operational experience, it will work on initiatives including [the] provision of a cloud mining service and selling next-generation mining boards equipped with mining chips,” the firm said in the statement.

Bitcoin mining photo via Shutterstock

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Japanese internet giant GMO revealed yesterday that it soon allow staff to receive some of their salary in bitcoin.

The bitcoin payroll system will allow the firm’s network of more than 4,000 employees to receive part of their salary in bitcoin in a move aimed to promote the development and adoption of the cryptocurrency, GMO said in a statement.


GMO plans to roll out the system starting from February 2018, for its March payroll, with a gradual expansion across the entire group likely to follow.

The company states:

“The GMO Internet Group will contribute to the development of virtual currencies in the world by promoting efforts related to virtual currency throughout the group.”

GMO in October announced plans for an initial coin offering (ICO), saying its new token would be used as as part of a payment system for an upcoming series of products.

According to the latest statement, the new system will use the token, dubbed “GMO coin,” to allow staff to purchase bitcoin as part of the scheme.

Employees will have a lower limit of 10,000 yen (around $88) and an upper limit 100,000 yen ($882) for the bitcoin portion of their monthly salaries, and will also receive a bonus of 10 percent of the chosen amount as a “incentive,” according to the firm.

Tokyo-based GMO first entered the cryptocurrency space with the opening of an exchange in May 2017.  The company, which offers web hosting and a range of other digital services, also announced in September the launch of a new cryptocurrency mining operation, which is set to commence in the first half of 2018.

Editor’s Note: Some of the statements in this report have been translated from Japanese.

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Japanese bitcoin exchange bitFlyer has officially launched in the US after receiving approval from regulators like the New York State Department of Financial Services (NYDFS).

Announced today, the move concludes a private beta that saw the exchange working with 2,000 initial users. The official launch also comes months after bitFlyer first revealed its intention to open its doors in the US. At the time, the startup said it had obtained permission to operate in 34 states.


As part of today’s launch, bitFlyer revealed that it had been granted a BitLicense from regulators in New York. Formalized in 2015, the BitLicense framework was an early effort to oversee companies working with cryptocurrencies in the US.

“BitFlyer is proud to have been granted a BitLicense to do business in the state of New York,” CEO Yuzo Kano said in a statement. “This is a nod of approval from one of the most influential state financial services regulators in the nation.”

Though the exchange will initially allow for only bitcoin trading, bitFlyer indicated that it would move to add support for additional cryptocurrencies over time.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in bitFlyer. 

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SBI Holdings, the financial services division of Japan’s SBI Group, has revealed plans to move deeper into the world of cryptocurrencies and blockchain.

In its latest financial report, SBI expressed plans for “the establishment of a new financial ecosystem based on cryptocurrency,” a move that includes carrying out joint research to gather “systematic knowledge” of blockchain technologies.


Aiming to “solve problems” within the crypto markets, the financial firm is looking to acquire cryptocurrencies directly, including through mining, as well as establishing ways of using cryptocurrencies, and providing investment opportunities. SBI will also “utilize cryptocurrency for remittance, trade finance and payments.” 

The company states:

“The SBI Group will endeavor to acquire cryptocurrencies, for the further development of products and services, and to secure market liquidity. This includes the mining of [bitcoin and bitcoin cash], and investments into U.S. Ripple (Ratio of 10.5%).”

In what appears to be a strong push into the cryptocurrency industry, the company restated its aim to establish a “dominant large-scale cryptocurrency exchange platform.”

SBI has been expressing growing interest in blockchain and cryptocurrencies since 2016, first investing in Japanese exchange bitFlyer, and later moving onto its own tests with the technology.

In September of this year, a joint venture between SBI and blockchain payments startup Ripple announced it will soon begin testing a money transfer system using distributed ledger technology between Japanese and South Korean banks.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in bitFlyer.

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Japanese digital services firm GMO Internet has developed a new blockchain-based know-your-customer (KYC) tool.

In an announcement, the company said that the application was specifically intended for use by banks when verifying the identities of new customers.


GMO Internet explained the system in the release, stating:

“The user submits the ‘personal information’ necessary for identity verification to the certification body, and signs the signature (acceptance with the ‘key’ paired with the address) from the terminal owned by the principal. The certification body confirms the ‘personal information’ of the user, generates ‘hash value of personal information,’ and records it on the blockchain in association with the address of the user associated with the signature.”

The current code for the tool has been made open-source, with GMO indicating that it will look to apply the tech in other parts of its wider business group, including some of its existing identity services.

“GMO Blockchain OSS is currently preparing for the development of [a] smartphone application for certification … and demonstration experiments in collaboration with GMO GlobalSign to put this mechanism into practical use,” the firm said.

The new tool is the latest launch from the company related to blockchain tech, coming months after it opened a cryptocurrency exchange in Japan and announced plans to create a cloud mining service. As previously reported, GMO, a publicly traded firm founded in the 1990s, is planning to spend tens of millions of dollars in the coming months to build the cryptocurrency mine.

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Japan’s Financial Services Agency (FSA) will begin more closely monitoring cryptocurrency exchanges from next month.

According to the Japan Times, the increased scrutiny is aimed to ensure that the companies comply to the revised payment services law, passed in April this year, which set out operational standards for exchanges, as well as recognizing bitcoin as a form of legal tender.


An FSA executive reportedly indicated the surveillance is intended both to regulate the exchanges and to ensure the healthy growth of the cryptocurrency market, saying:

“We pursue both market fostering and regulation enforcement. … We aim for sound market development.”

The payment services law passed earlier this year established anti-money laundering and know-your-customer rules for the exchanges. The law is also intended to enforce security standards aimed to protect the exchanges from the risk of cyberattack.

The law specifies that all exchanges must report to the authorities by the end of September to confirm they are compliant with the new rules. The FSA also has the remit to conduct on-site inspections if deemed necessary.

To monitor the over 20 cryptocurrency exchanges operating in Japan, the FSA last month established a specialised surveillance team, reportedly comprised of 30 staff members.

Japan is no stranger to cryptocurrency based fraud, with 33 cases, representing more than a half of million dollars-worth of loses, reported in the first seven months of 2017.

Further, in 2014, the now-notorious Japan-based bitcoin exchange Mt Gox collapsed, resulting in the loss of millions of dollars in customers’ funds. Japanese lawmakers have previously cited the exchange’s failure as a key driver in the move to regulate the cryptocurrency industry.

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