Japanese bitcoin market bitFlyer has added a bitcoin crowdfunding platform called ‘fundFlyer’ to its feature list, launching the first service of its type in the country.
The system works in a fashion similar to more established crowdfunding services like Kickstarter and Japan’s own Shooting Star, but is taking a significant step towards mainstreaming bitcoin use in its home country with at least one high-profile user.
The fundFlyer website lists “the arts, product and software development, events, disaster prevention and political activity” as projects with bitcoin crowdfunding potential, and encourages project owners to use the platform to build long-lasting communities.
Like other services, it allows project owners to set funding goals and differing levels of gifts, or perks, for supporters. Normally fundFlyer itself receives 10% of the total amount raised, but is currently offering 0% usage fees as an introductory campaign.
Payouts are only made if projects reach their targets, and owners may claim the funds either as bitcoins or cash, through bitFlyer’s exchange. In the case of an unsuccessful campaign, bitcoins will be paid back to supporters.
Politician on board
The service’s first listed project belongs to none other than Mineyuki Fukuda, head of the Japanese government’s IT Strategy Committee and its leading bitcoin proponent.
Fukuda also has an active fiat currency-based crowdfunding project to take a study tour of bitcoin interests in San Francisco and Washington DC, but hopes to use the bitcoin-based fundFlyer campaign to supplement tour costs.
His fundFlyer project has raised 1.277 BTC of its 4 BTC goal, and will finish on 15th September. Supporter gifts are similar on both campaigns, ranging from a published copy of his report, to seminars and even a tour of the Japanese parliament.
Fukuda said his motive in starting the campaigns was also to demonstrate personally the advantages that come with using bitcoin and digital currencies to others in business and politics.
Japan’s first ‘post-Gox’ exchange
Launched in April 2014, BitFlyer was the first serious bitcoin market in Japan after Mt Gox collapsed in February. In the intervening period, residents of the world’s third-largest economy had to use overseas markets or face-to-face trades if they wanted to acquire bitcoin.
In July, it announced it had raised $1.6m in funding and is currently looking for further investment from overseas to fund its international expansion.
Compliance and tax
CEO Yuzo Kano, a former trader at Goldman Sachs, and CTO Takafumi Komiyama head a current staff of 14, plus investors.
BitFlyer is a simple set-price market similar to Coinbase, rather than a full open order book trading exchange. This means it actually buys the bitcoins itself and sells those it has in its account, rather than allowing trading between users.
The exchange is fully compliant with know-your-customer (KYC) regulations for Japanese financial institutions, and its prices also include Japanese consumption tax (which was recently hiked from 5% to 8%).
The Japanese tax authorities are expected to require bitcoin users and businesses to pay their own consumption tax on bitcoin purchases if they acquired the bitcoin from a non-Japanese exchange, or one that did not include tax in its price.