LINE App announced a large increase in usage of their consumer-facing virtual wallet, LINE Pay in 2017. LINE Pay processed more than 450 billion JPY (approx. $4 billion) in revenue. Accompanying the spike in revenue, LINE gained more than 40 million registered users on LINE Pay last year.
In comparison, CoinBase has generated roughly $1 billion in revenue this year and currently has roughly 14 million registered users. LINE is developing their financial services arm to enable them to move into the FinTech sector.
Their successful tests between 2014 and 2017 exemplify a desire for consumers to have a trusted brand in order to achieve widespread acceptance of the emerging technology. In order to expand these service offerings to the new and emerging markets related to cryptocurrency, LINE has filed for a license from the Japanese Financial Services Agency (FSA).
According to the official press release:
The application process for registration as a virtual currency exchanger has already been started with the Financial Services Agency [FSA], and it is currently under review.
Line is among roughly 30 other firms to apply for an exchange operation license since Japan formed a new set of regulations which recognized bitcoin as a legal payment method. The new regulations provided Japanese exchange operators with a clear framework they could operate within.
What does LINE hope to achieve with their crypto exchange?
LINE is hoping to become a leader in FinTech and emerging technology. To meet this end, they have determined that forming an exchange is a strong step forward. They chose to operate their financial services out of Japan due to the clear and open-minded regulations that have been established so far
FinTech services have been a hot topic over the last several years, because of the consumer benefits from FinTechs. Entrenched operations such as central banks were not incredibly user-friendly and offered less control over user funds than a cryptocurrency such as bitcoin or ether could.
To date, LINE Pay is being accepted at more than 30 million merchants internationally.
What benefits can LINE offer to the greater crypto community?
LINE brings an established community of more than 200 million Monthly Active Users (MAUs) from their platform and offers them a window into the new and exciting world of cryptocurrency and blockchain. By adding a crypto exchange to their financial offerings, LINE can also help to accelerate the rate at which merchants accept cryptocurrency.
If LINE owns the exchange, then users can (theoretically) operate in whatever cryptocurrencies LINE supports with a significantly reduced time from sale of tokens and coins to payment for their goods. This helps to eliminate volatility risks for merchants and users alike, while simultaneously allowing LINE to move more volume of cryptocurrency on average.