A former Goldman Sachs employee has raised $1.6m in funding to power a new Japan-based bitcoin exchange, according to Bloomberg Businessweek.
Called bitFlyer, the exchange aspires to recapture the market position vacated by Mt. Gox, the Japan-based exchange that was once the ecosystem's largest trading platform. BitFlyer is seeking additional capital from overseas VCs and hopes to launch in markets outside of Japan before 2015, the report says.
The exchange is the brainchild of 38-year-old former derivatives and convertible bonds trader Yuzo Kano, who left his job at Goldman Sachs in December to start his own bitcoin project.
He told the Bloomberg that as a result of the collapse of Mt. Gox he feels an increased pressure to deliver a quality product to market, saying:
"That’s one less competitor for us, but it also left many Japanese with a very negative impression of bitcoin. We already had a company then and felt it was up to us to rebuild the trust."
BitFlyer, which has been live since April, is not alone in its desire to attack the now-growing Japanese market. Earlier this month, China-based bitcoin ATM manufacturer BitOcean announced it would partner with New York-based exchange technology provider Atlas ATS to launch an exchange in the Asian market.
Kano told Bloomberg that bitFlyer will act as the counterparty for buyers and sellers, a decision it says will allow it to streamline the way it finalizes transactions.
With that, Kano aims to eliminate complex price-setting mechanisms, thus appearing more consumer friendly. However, he acknowledges the difficulties of the decision, stating:
"That’s a major advantage we have over other exchanges, but it also means we take on the risk. Controlling that risk is something you can’t do without experience."
Kano said he launched the venture due to the upside he sees in the bitcoin market, and because of his interest in complex systems.
Japan heats up
Though not as influential a bitcoin market as China, recent news events suggest consumers and government officials in Japan are beginning to become more interested in bitcoin.
Japan announced in May that it would put off regulating bitcoin in order to consider measures that would help digital currency boost the nation's overall economy.
Further, a government-backed industry association, the Japan Authority of Digital Asset (JADA), launched this month with the goal of helping the country's businesses establish their own regulations.
Computer with yen image via Shutterstock