Softbank Group to acquire Yahoo Japan shares — a boost to crypto in Japan?

Multi-national company the SoftBank Group, which is a major mobile carrier business in Japan, has announced that it will make a tender offer for shares of Yahoo Japan Corporation, Japan’s leading Internet portal operator. SoftBank plans to buy Yahoo Japan’s shares for approximately 221.0 billion yen, securing around 11% of the 35% of Yahoo Japan Corporation shares owned by US-based Altaba (formerly, Yahoo! Inc.).

SoftBank has facilitated an alliance with Yahoo Japan focusing on ecommerce and expanded services for smartphone users. The company has announced a plan to expand the scope of the alliance, to include the content and sharing business fields, by establishing capital relationships with Yahoo Japan.

In April, Yahoo Japan announced that its wholly-owned subsidiary, Z Corporation, would buy a minority stake in the cryptocurrency exchange BitARG. Yahoo Japan will take a 40% stake and enter the blockchain business, which is expected to have potential in various fields, and the cryptocurrency business as the Yahoo Group.

In July last year, SoftBank, together with TBCASoft, a US-based startup focusing on the development of blockchain technology, and other telecom carriers, launched the Carrier Blockchain Study Group (CBSG), a global blockchain consortium for telecom carriers. SoftBank has indicated its intention to jointly develop an innovative blockchain platform specializing in telecom carriers.

At the general meeting of shareholders of the SoftBank Group held last month, Chairman & CEO Masayoshi Son stated: “the current speculative value of blockchain-based currencies is higher than their real value.” However, he also commented “it is still a brand new technology” and “SoftBank is working on blockchain-based technologies.” The acquisition of Yahoo Japan shares by SoftBank could lead to new developments in the cryptocurrency and blockchain businesses of the two companies.

In other news, the widely circulated story that Japan’s FSA was considering regulating cryptocurrencies under the Financial Instruments and Exchange Act has been debunked, with the FSA telling Japan-based Crypto Watch news that there was “no such fact.” Interest in the original story remained high, however, given the impact such a move would have had on Japan’s crypto exchanges. Under the Payment Services Act, the law that currently regulates exchanges in Japan, operators must register with the FSA and cryptocurrencies are treated as a means of payment in the same way as electronic money.

Changing the governing law to the FIEA, which is applied to securities firms and other financial institutions, would have led to a greatly enhanced investor protection framework. Under the FIEA, for example, cryptocurrency exchange operators would have been obliged to manage customer funds separately from corporate funds, stringent insider trading laws would have applied — and cryptocurrencies would have be treated as financial products.

To outside observers, such a shift in governing law would have aligned well with Japan’s efforts overall to legitimize the crypto economy, but nonetheless, the FSA is adamant it has no such plans.

About the author

Masayuki Tashiro is the President & CEO of FISCO Digital Asset Group. He has worked as an analyst providing assessments on futures, options, cash equity, and overall market and index movement since 2010 and currently works as an analyst with a focus on cryptocurrencies. He holds a Master of Financial Technical Analysis and is a regular commentator on the Nikkei CNBC television channel, and a frequent contributor to economic magazines such as Forbes Japan.

Planned share purchase brings potential to extend Yahoo! Japan’s crypto footprint