Sunday, January 29, 2023

Japan Faces a Shortage of Software Engineers to Keep Its Crypto Industry Running

Japan Faces a Shortage of Software Engineers to Keep Its Crypto Industry Running

Japan is one of the most crypto-friendly countries in the world, and the first to have clear regulations for the crypto space. But even though the digital token industry is booming in the country, the security infrastructure of some large crypto exchanges has failed to protect investors’ funds. One reason for this could be a lack of properly qualified software engineers in the country.

Also see: Cryptocurrency Exchange Bitfinex Adds 12 New Tokens for Trading

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Lack of Software Engineers Can Cripple Crypto Industry

Japan has witnessed two of the world’s biggest crypto hacks — Mt. Gox in 2013-14 and Coincheck’s more recent $530 million USD heist.

As reported by Reuters, Coincheck could not find skilled IT professionals in the country that could build the impenetrable security infrastructure required to store such large value.

Last month, chief technology offer Koichiro Wada said:

“We were aware we didn’t have enough people working on internal checks, management, and system risk. We strived to expand using headhunters and agencies, but ended up in this situation.”

According to the Financial Services Agency (FSA), Japan’s financial regulator that oversees the banking, securities, and exchange market,  there are over 32 crypto exchanges in the country and 100 have filed applications to secure an official license. However, since the Coincheck incident, the FSA has been pushing exchanges to increase security.

Japan street

Mike Kayamori, CEO of QUOINEX, said: “The FSA is breathing down necks on security, compliance, and risk, and if you don’t hire, you won’t be able to survive.”

The country has recently seen high demand for cryptocurrency related skills — including blockchain experts, software engineers, and cybersecurity engineers. The Japanese crypto trading market is now the world’s largest in volume. However, a weak security infrastructure could lead to the industry crumbling.

We should note that, other than the two high-profile hacks, Japan’s digital asset exchanges have been pretty secure… so far. None quite approach the kind of market share Mt. Gox had back in the day, but in dollar value the amounts Japan’s biggest exchanges protect is much higher now.

Japan Needs Another 50,000 Software Engineers by 2020

According to Japan’s Ministry of Economy, Trade, and Industry, the country could have a deficit of 50,000 jobs in the field of big data and artificial intelligence by the year 2020. The shortfall has led exchanges to pay high salaries and benefits to attract professional IT specialists from other sectors.

Japan lucky cat security

Reuters told of 21-year old self-taught software engineer Ryo Fukuda, who entered the industry when the demand was high.  Fukuda joined Next Currency, a crypto exchange awaiting approval from FSA to operate.

“I’d been doing nothing but crypto and my own projects, so I had the experience other engineers and companies couldn’t get. Now the market has really taken off and there’s a shortage of engineers. That was when my value to the market soared,” said Fukuda.

In fact, demand for crypto-related skills has been high globally since the 2017 boom. However, locales like London and San Francisco do not suffer from Japan’s deficit due to existing research sectors.

Japan could outsource IT professionals from countries that have highly skilled software engineers, such as India. The shortfall can also be an opportunity to initiate outsourcing services businesses, which could mutually benefit both nations.

Should Japan look to outsource software engineers? Let us know your views in the comments section.

Images via Pixabay

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