Will Naver-Dunamu cooperation become a milestone? Japan's PayPay acquires stake in Binance Japan.

PayPay, Japan's largest mobile payment service provider under SoftBank, has acquired a stake in the cryptocurrency exchange Binance Japan, marking the first major model combining mobile payments and cryptocurrency. Industry analysts predict this case could serve as a harbinger of future collaboration between Naver and Dunamu.

According to Reuters on the 10th, PayPay acquired a 40% stake in Binance Japan, the Japanese subsidiary of Binance, the world's largest cryptocurrency exchange, on the 9th (local time). Through this acquisition, the two companies plan to establish a new financial model integrating simple payment and cryptocurrency services. Specifically, the company plans to offer features that allow users to purchase cryptocurrencies on Binance Japan using "PayPay Money," a prepaid recharge within the PayPay app, or withdraw the proceeds from sales into PayPay Money.



Masayoshi Yanase, Head of PayPay's Financial Business Strategy Division, said, "We will provide a solution that combines the technological prowess of Binance, the world's largest exchange, with the convenience and security of PayPay," adding, "We will contribute to the development of Japan's financial infrastructure through customized financial services."



PayPay, jointly established by SoftBank Group and Yahoo Japan, is Japan's largest mobile payment service provider. With over 70 million cumulative subscribers, it holds the leading share of the Japanese mobile payment market. Offering QR code-based payment services at over 4 million participating stores, including major convenience stores and restaurants, PayPay is recognized as a leading platform for transforming Japan's cash-centric culture into one centered on digital payments.

Some say this case serves as a precursor to the future cooperation between Naver and Dunamu in Korea. Naver Financial (Naver Pay), a subsidiary of Naver, is reportedly pursuing a comprehensive stock swap to wholly acquire Dunamu, the operator of Upbit, Korea's largest cryptocurrency exchange. This acquisition of Upbit, the largest cryptocurrency exchange in Korea, by Naver Pay, the leading player in the domestic mobile payment market, is seen as reminiscent of the PayPay-Binance deal.

In this context, the possibility of Upbit integrating with Naver Pay Money has been raised. Just as PayPay Money is being introduced in Japan, directly connecting to Binance Japan's cryptocurrency trading functionality, the Upbit platform could integrate Naver Pay Money, enabling simpler cryptocurrency trading without the need for bank account linking or deposit procedures.

SoftBank's recent announcement that it plans to list PayPay on the Nasdaq is also noteworthy. This acquisition of Binance Japan's stake can be interpreted as a strategic move to enhance its value as a global fintech company, beyond a simple service integration. In Korea, there's also talk of Naver Financial pursuing a Nasdaq listing through a merger with Dunamu, and the Japanese case lends credence to this speculation.



However, the domestic authorities' regulatory stance on virtual currency is expected to be a variable. Experts predict that, under the principle of "separation of money and value," which strictly separates traditional finance from virtual currency, the authorities may block the use of Naver Pay Money, a prepaid electronic payment method under the Electronic Financial Transactions Act, for virtual currency payments. Kwon Oh-hoon, an attorney at Cha & Kwon Law Firm, explained, "As seen in the case of Korea blocking virtual currency purchases with credit cards, it seems highly likely that financial policies will also block virtual currency purchases using prepaid electronic payment methods." He added, "Japan has a relatively flexible environment because it regulates both virtual currency and fintech simultaneously under its Payment and Settlement Act."

Attorney Kim Dong-hwan of DLG Law Firm also said, “Although there are no explicit legal provisions related to this, it may not be easy to link the two platforms in Korea and allow users to purchase virtual currency as a prepaid electronic payment method.” He added, “Financial authorities may view this as an act of mediating the exchange between money and virtual assets and may require reporting as a virtual asset service provider (VASP) or possession of a real-name verified deposit/withdrawal account.”

Reporter Kim Jeong-woo