Line, which has more than 200 million monthly active users worldwide, announced today (Jan. 31) that it is planning to start a cryptocurrency exchange.
The Tokyo-based chat app said in a statement that it has filed an application for registering a crypto exchange with Japan’s financial regulator, and that the application is currently under review. The company will also launch a variety of financial services, including a place to trade cryptocurrencies, within the chat app. These new initiatives will be operated by Line Financial, a subsidiary established earlier this month.
Line already offers a mobile payment service within its chat app, called Line Pay. With 40 million registered users, the digital wallet’s annual global transaction volume reached ¥450 billion (around $4 billion) last year, the company said. In comparison, Coinbase, one of the world’s largest crypto exchanges, has about 13 million users.
The move underscores how Japan has become one of Asia’s most friendly jurisdictions for cryptocurrencies, particularly as China and South Korea have been cracking down on them. In September, Japan’s financial regulator granted a first batch of 11 companies licenses for operating crypto exchanges. Bitcoin-yen trading comes after bitcoin trading in the dollar and euro as the third-largest currency pair in bitcoin markets, accounting for more than 10% of global trades.
Line is probably best known for its characters like Brown the bear and Cony the rabbit, whose images adorn not just stickers in the chat app but also merchandise sold in Line stores around the world. But as user numbers flatten, the company is looking for alternative revenue streams. According to its statement, Line is also hiring people with expertise in blockchain technology and finance, as the company “hopes to become a leader in the FinTech industry as the world moves increasingly towards a cashless wallet-less society.”
Japan’s embrace of cryptotrading hit a snag last week after hackers stole $530 million of cryptocurrencies from Tokyo-based exchange Coincheck. Japanese authorities said they would investigate all local crypto exchanges for security gaps following the breach.