In 2017, the spectacular rise in the price of bitcoin and the fear of a bubble led the central banks and regulators to position themselves in relation to cryptocurrencies or cryptoassets, producing a very wide variety of responses, ranging from various forms of acceptance and regulation to ban.
In East Asia, China and Japan are among the countries where the cryptocurrencies fever has been more acute, accounting for a very high proportion of global transactions in different moments. However, the two countries have adopted opposite positions in relation to cryptocurrencies: China has been restricting their use since 2017 and has completely banned both Initial Coin Offerings (ICOs) and the activity of cryptocurrency exchanges in its territory, while developing research related to the blockchain, the innovation which sustains cryptocurrencies. In contrast, the Financial Services Agency of Japan has adopted a position among the most favorable worldwide, considers cryptocurrencies as means of payment, introduced a licensing system for electronic platforms and has been responding with specific regulations to fraud and theft at exchanges.
This paper seeks to analyze these contrasting positions. It aims to establish precisely the measures adopted in both countries, relating them to the specific challenges and the trajectory of their respective financial and fintech sectors, and to discuss which objectives may have predominated -respectively improving the position of the Japanese financial centre through the development of a promising frontier market, or privileging the stability of the domestic financial sphere and a controlled capital account in the case of China.