Ripple has had a tumultuous year in the United States with a lawsuit from the Securities and Exchange Commision. However, Ripple is extremely popular in Japan. In fact, a lot of the price activity of XRP has been because of Japanese investors purchasing the cryptocurrency driving the price upwards.
The popularity of Ripple in Japan perplexes a lot of westerners. But it actually makes a lot of sense once one understands a little about Japanese culture and how much faith the largest VC fund in Japan has in Ripple.
Ripple and SBI Holdings Partnership
The biggest driver of the popularity of Ripple in Japan has been a partnership between Japan the most well-respected VC firm in Japan, SBI Holdings and Ripple.
Anyway, SBI Holdings invested nearly $300 million into Ripple in 2017. This investment was actually cited in the SEC lawsuit as an improper sale of a security to SBI Holdings. The founder of SBI Holdings and Ripple board member even sent out a tweet talking about the new all time high of XRP that was also cited in the lawsuit.
To further complicate matters, Ripple was advertised much differently in Japan than it was in the United States. For one, Ripple was advertised as more of a remittance service that could be used instantly with 40 currencies and 70 countries. It was also touted as the next Bitcoin at a very low price. Most of this advertising was done organically on Twitter.
The uses for Ripple are true, obviously. The difference is that Ripple did not have an advertising campaign like that in the United States.
The advertising campaign in Japan was just a lot more effective than the one in the United States.
Japanese Culture Also Plays a Role
The other aspect of Ripple’s success not discussed by many is the unique culture in Japan. The western world has a general distrust of large banks and financial institutions. A clear focus on decentralization and privacy appears to be more of the focus of cryptocurrencies popular in western countries (Bitcoin, Ethereum, etc.).
This is also true in Japan to an extent. However, the Japanese tend to hold the government and financial institutions in much higher esteem than westerners. This means an endorsement from a company like SBI Holdings may as well be a stamp of approval for investment.
The same sentiment does not apply in western countries. And due to that Ripple simply never took off quite the same as it did in Japan.
Japan Still Bullish on Ripple
Japan still remains bullish on Ripple despite the ongoing SEC lawsuit. This is partly because Ripple is considered a cryptocurrency in Japan and faces no stringent regulations from regulators.
It is not expected that Ripple will face regulations because of their close partnership with SBI Holdings.
SBI Holdings also remains steadfast in their support of Ripple despite the lawsuit. In fact, SBI has invested even more money into Ripple since the lawsuit.
The confidence SBI Holdings has in Ripple has certainly helped buoy the popularity of the cryptocurrency in the country. But Ripple will have to resolve the lawsuit and continue to make progress before they can resume the path they were on as a rising worldwide remittance service.
The Future of Ripple
The overall future of Ripple is not nearly as clear cut as SBI Holdings and Ripple will have you believe. The company is still facing a lawsuit from the SEC that can significantly impact the ability to do business in the United States. Furthermore, XRP has been delisted from a lot of US based or US targeted cryptocurrency exchanges like Coinbase and Binance.
As for the case, the SEC does have a good case against Ripple. Though Ripple might just pay a fine to resolve the problem rather than continue to drag the problem out for years.
One other interesting note in regards to Japan is that Ripple actually considered moving the company headquarters because the United States has a very opaque definition of securities vs cryptocurrency.
So, there could possibly be a relocation of Ripple from the United States to Japan at some point in the future. That really just depends on how the lawsuit with the SEC turns out.
Is Ripple a Good Investment?
The Japanese and SBI Holdings certainly view Ripple as a good monetary investment. We will say that Ripple has some good uses for international remittances.
It is actually useful if you want to transfer money internationally.
However, an investment in a cryptocurrency must always be compared to other cryptocurrencies. The two major cryptocurrencies that one should compare every cryptocurrency investment are Bitcoin and Ethereum.
When compared to Bitcoin and Ethereum, Ripple simply does not make much sense as a good investment. You should have some money in it for diversity. But even calling Ripple a cryptocurrency does not really make much sense because it is not decentralized.
It is essentially a remittance system used by banks to transfer money faster and cheaper than they can with SWIFT.
We would pass on Ripple as an investment. Bitcoin, Ethereum, and Chainlink would all make a better investment than Ripple in our opinion.
That sums it up for the popularity of Ripple in Japan. The popularity almost entirely comes from the partnership Ripple has with SBI Holdings. And this partnership has not faltered due to the ongoing lawsuit Ripple has with the SEC.
Japanese citizens generally look highly upon SBI Holdings due to the success that the company had with Japanese technology companies in the early 2000s. Investors hope that SBI Holdings will have the same success with Ripple that it had with tech back in the early 2000s.
We are not nearly as bullish on Ripple as the Japanese. The product itself does provide a good service and adds value. But it is not really decentralized like Bitcoin and Ethereum. Due to that, Bitcoin and Ethereum make a much better investment.