Peach Airline to Accept Bitcoin After Japan Recognizes Cryptocurrency
Peach Aviation will be the first Japanese airline to accept bitcoins
as payment for plane tickets, according to a statement made by the budget carrier’s CEO Shinichi Inoue on May 22. Peach also plans to install bitcoin ATMs in Japanese airports as part of its bid to attract more tourism from Asia. Peach operates domestic flights as well as flights to China, Korea, and Thailand, and passengers should be able to purchase tickets with Bitcoin by the end of the year, Inoue said. Although Peach is not the first carrier to embrace the cryptocurrency, the decision is still significant.
Three years ago, airBaltic became the very first airline to accept bitcoin payments. In 2015, the Universal Air Travel Plan (UATP), a payment network owned by a consortium of major international airlines, partnered with Bitnet to accept cryptocurrency payments for its more than 260 member airlines. UATP’s membership represents approximately 95 percent of global airline capacity, and the industry group had earlier added support for other alternative payment options like PayPal and Alipay.
Although paying for airline tickets with bitcoin on most major airlines is technically possible, it’s still up to individual airlines to decide if they will support the practice. As of yet, only a handful have elected to do so, despite the anti-fraud benefits of bitcoin transactions. Third-party online travel booking sites like CheapAir and Expedia accept bitcoin payments, but precious few airlines feature a simple “Pay With Bitcoin” button that UATP’s integration supports.
Peach’s announcement comes hot on the heels of a landmark regulatory decision: Japan’s official recognition of bitcoin as a legal payment method, thanks to an act of parliament that took effect on April 1. The law came as the result of more than a year of debate in Japan about how to handle the cryptocurrency. The Japanese parliament first called for the regulation of bitcoin and bitcoin exchanges by the country’s Financial Services Agency, the country’s financial regulatory watchdog, in May of last year.
The new law also brings Japan’s bitcoin exchanges, which handle nearly half of global trading volume, under the same know-your-customer and anti-money laundering rules that apply to banks and other financial institutions. Bitcoin exchanges in Japan must now meet minimum capital requirements, follow operational and cyber security best practices and submit to annual audits by the Financial Services Agency. More than twenty exchanges have applied for FSA licenses since the new law took effect.
Even before the Japanese government officially recognized bitcoin, merchants were already rushing to accept payment with the cryptocurrency. Merchant adoption of bitcoin quadrupled last year, from about 900 merchants at the start of 2016 to more than 4600 today, according to a survey by NHK. The rush of acceptance of the new payment method comes as consumer spending in Japan has stagnated in recent years. Earlier ideas to boost consumer spending included “helicopter money” or simply mailing checks to Japanese citizens, but now both merchants and the government are hoping that a new payment method will encourage consumers to get out and spend.
Alan Zibluk Market Hive Founding Member