A lot of people have been asking my opinion on whether Japan will ban ICOs.

China and South Korea have essentially implemented full-on bans of cryptocurrency and ICOs. A Siberian winter for cryptocurrencies also appears imminent in Russia.

So will Japan follow suit ?

The short answer is: I really don’t know, but I think a categorical outright ban is unlikely.

Make no mistake, a ban on ICOs in Japan is not impossible. The truth is that it is still early days for ICOs in Japan. As I discussed in my book, only a handful of ICOs in Japan are currently in the works.

• Payments enabler Omise boasts a largely Japanese team but is based in Thailand.
• Alis represented the first thoroughly Japanese ICO, successfully completed last month.
• Tokyo-based Telcoin will offer their upcoming ICO in Singapore.
• The ICOs of Japan’s Comsa and Synchrolife are currently underway.
• Tokyo-based bitcoin prediction platform Phantom AI also recently announced its upcoming ICO.

Thus far, all of the ICOs linked to Japan appear to encompass legitimate projects run by credible founding teams. Whether or not you believe in the respective projects, brilliant minds generally reside behind each one. Furthermore, some foreign startups are eyeing Japan for their ICO launches, notably Bread from Switzerland and Drivezy from India.

The Japanese government is thus taking a methodical approach to regulating the sector. Theoretically, it may decide on a blanket ban.

Constructive regulation more likely

However, my sense based on empirical observation and some informal conversations with key actors in the ecosystem and in government, is that a blanket ban on token offerings in Japan is unlikely. Quite the contrary, at the end of September Japan’s Financial Services Agency approved license applications for 11 cryptocurrency exchanges. Barring a high-stakes scandal (which could understandably trigger drastic action), I believe that the Japanese authorities will continue on their measured path of constructive regulation.

Perhaps partly motivated by the country’s historical ceding of ground to other Asian financial hubs like Hong Kong and Singapore, Japan has much to gain by sustaining its healthy environment for the development of cryptocurrency. Less visible but happening behind the scenes is the government’s encouragement of incumbent players, such as the mega-banks, large institutional investors, and certain retailers, to embrace cryptocurrency.

Japan arguably stands at the forefront of the global cryptocurrency market today. I’ll be paying close attention to how the environment here evolves.

Finally, I’d like to thank everyone who has purchased Japan: Bitcoin #1. The sales in the first two weeks have already far surpassed expectations. As a reminder, profits from the sale of this book go to Japan’s Tohoku region, still rebuilding from March 2011.