On November 10th, the "8 Questions" column interviewed two Japanese guests, Seihaku Yoshida and Shimura Masaru, in Wuzhen. Yoshida World Expo is currently the CEO of HashPort Inc (accelerator), and began focusing on blockchain in 2015. Shimura has 35 years of working experience at Mitsui Sumitomo Bank in Japan. He has served as the president of the Asia Pacific region at Mitsui Sumitomo Financial Group and was the CEO of Mitsui Sumitomo Credit Card.
From the Japanese currency circle to the chain circle, from the Bitcoin chat to the DC / EP, the global wave of blockchain is unstoppable. The dictation of two guests helped me open a door to understand the current status of the Japanese blockchain industry.
They told me that Japan has not explicitly banned ICO and IEO so far, but Japan will pass a new bill next April to legislate on this. Japan has allowed more than 20 digital currencies including bitcoin as a payment method, but almost no one uses digital currency to pay because Japan is a big cash country and electronic payment is not to be seen.
The threshold for opening a digital currency exchange in Japan is very high. The team must have a scale of at least 1 billion yen and more than 40 people to be eligible. Therefore, digital exchanges in Japan basically have a background of listed companies. Because the cost of opening an exchange is too large, the business model is not clear when engaging in public chain. Therefore, Japanese blockchain entrepreneurs are more technical service providers, and the money-making model is simple.
Japanese blockchain entrepreneurs are not fascinated by technological innovation, but they have done a great job in blockchain games, which is also a feature of the Japanese blockchain industry. In terms of investment, Japanese investment is more inclined to invest in the equity of blockchain companies, hoping to make money by listing the invested companies. The following dialogue has been adjusted without change.
Jia Xiaobei: How did you feel after participating in the Second World Blockchain Conference · Wuzhen?
Yoshida World Expo: I have participated in many blockchain activities, this time is different from the summit atmosphere I attended before. The main reason is that the atmosphere of the entire industry has become higher. There is also a point that this time the entire industry is developing in a sound and discarding direction.
Shimura Masanozu: Actually, I have participated in many blockchain activities, and I have been participating since 2013. I've been to Shanghai and Singapore. What ’s different about this event is that here you see that this is a very wide industry, not just limited to finance or a certain field, the entire market is slowly moving towards a mature direction. This is a very large one reward.
Jia Xiaobei: Is the Japanese currency circle and chain circle clearly divided?
Expo Yoshida: It is very clear in Japan. However, in Japan, the blockchain services that involve digital currencies must go through the link of the exchange. Therefore, the exchange plays a relatively clear role in combining the chain circle and the currency circle.
Jia Xiaobei: Many people on the Internet say that Satoshi Nakamoto is Japanese and Japanese. What do you think?
Expo Yoshida: It can be said that it is not Japanese. Satoshi Nakamoto published the information in European time, which is inverse time difference with Japan. Unless he is a night owl, he will not post at this time.
In addition, the white paper published by Satoshi Nakamoto is in English, and the English on the white paper is very professional English. I feel that Japan is both a geek and a financial savvy. Not many people speak English very well. But if the person who is really good at English and who can write this dissertation is Japanese, I should already know who he is.
Shimura Masanozu: Many friends of mine and I think Satoshi Nakamoto is not Japanese. In 2008, the Japanese were not particularly successful in this particularly high-end technology field, so we don't think they are Japanese.
Jia Xiaobei: Japanese blockchain entrepreneurs, which directions do they choose to use as their own entrepreneurial projects when starting a business? Such as public chains, alliance chains, exchanges, and technical service providers?
Yoshida World Expo: Many Japanese blockchain entrepreneurs are technology providers, which are to build wallets, provide some security services for exchanges, or comply with peripheral services.
The other is to open an exchange, but the threshold for opening an exchange in Japan is very high. First, it must be approved. The minimum standard for obtaining an exchange license in Japan is: the company has 1 billion yen (10 million US dollars) of endorsement of funds and a scale of no less than 40 people. Only with these qualifications can it be possible to obtain an exchange license. These initial investments are not something that grass-roots entrepreneurs can afford, nor are they a particularly capable entrepreneur who can raise a few tens of millions of dollars. Therefore, the companies that are currently licensed by the exchange are all teams with backgrounds in listed companies.
Exchanges are not the first choice for entrepreneurs, nor are public chains. The business model of the public chain is not particularly clear, and Japan has strict regulations on currency issuance. Even overseas ICOs have problems with taxation.
There are actually more and more entrepreneurship in blockchain games. We held the Tokyo Blockchain Conference in September, and 500 people came. It was the first time when it opened last year, with less than 100 participants. This year's scale has become five times that of last year. Although most of the participants were inexperienced developers, there were probably dozens of companies who participated in the event as sponsors and partners. The entire Japanese blockchain industry may be more optimistic about the blockchain game, which may be characteristic of the Japanese blockchain.
Jia Xiaobei: Does Japan have a fanatical pursuit of blockchain technology itself? For example, how many people are going to solve the problem of capacity expansion and speed?
Expo Yoshida: There are also some very high-tech teams trying this, but not many people.
Jia Xiaobei: What is the most popular application of blockchain in Japan?
Yoshida World Expo: The most highly evaluated application at the world level is still in the game field. The latest hit is Crypto Heroes, made by a Japanese gaming company. Among all game apps, it should have the highest daily life. I know that many people are fans of Crypto Cat, but I think it is more fun than Crypto Cat.
Jia Xiaobei: In terms of investment, what is the preference of the Japanese blockchain industry?
Yoshida World Expo: If Japan's investment preferences are general, it may be technical services. Equity investment is a more common choice. There are many venture capital companies that are more optimistic about equity investment than investment in the currency itself. Their model is not necessarily to issue coins or directly make money with this thing. It is more expected that some companies will be listed on the Tokyo Stock Exchange in the future.
The reason why I said that technical service companies are more popular just now is because the revenue model of technical service companies is relatively simple and straightforward, which is to sell a new service and then collect money.
Traditional VCs will also make some investments in technology services. Some people on the exchange are also investing, but the relationship with the currency is not particularly active. Japan has two large, regulated Token Funds, but they are less active than Chinese funds.
Jia Xiaobei: What is the current status of Japan in the industry + blockchain?
Yoshida World Expo: Industry + Blockchain is very hot in Japan. But it's not using blockchain technology to package the entire industry, but companies will introduce blockchain technology when they transition to digital.
The companies that had a better transition to the Internet in the past were all information-oriented companies or industries that have affinity with the Internet. But there are also many companies, and the digital transformation in the Internet era is not particularly sufficient, or not profitable through the Internet.
However, they believe that blockchain has a very friendly affinity with logistics, finance, and content industries, especially those related to assets, and there will definitely be many attempts in the future. They believe that in the future, they can make a very good digital transformation for their enterprises through the blockchain, which is a problem that various industries are considering now.
Jia Xiaobei: Is there a better combination now?
Yoshida World Expo: It is still in the trial stage, but I know that several logistics companies have already begun some trials. Another very good case is that Mitsubishi Bank will increase the liquidity of some small assets through STO. Jia Xiaobei: The Japanese government has allowed Bitcoin to become a payment method. So how many people in Japan now use Bitcoin or other digital currencies to make payments?
Shimura Masayuki: It is a pity that almost no one uses Bitcoin or other digital currencies as a payment method.
In 2017, Japan passed a bill to support Bitcoin officially becoming a payment method. It has been two years, but digital currency payment in Japan may be limited to a large electronics store. You cannot see digital currency or Bitcoin on the street. As an innovative payment method.
Japan is a country with a heavy cash culture, and its total consumption in a year is now 30 trillion US dollars. Among them, electronic payment plus credit card payment accounted for only 5 trillion US dollars, accounting for 1/6, and cash accounting for 5/6.
In this 1/6, one big head is credit card payment, the other big head is transportation card payment. The popularity of transportation cards and credit cards is very high, and the settlement speed is very fast.
Under such circumstances, not only bitcoin payments, but also other electronic payment methods are not particularly popular in Japan.
Jia Xiaobei: How many people do you think might hold Bitcoin in Japan?
Shimura Masanozu: There may be many people who have held bitcoin in Japan, but there are not many people who really have a good impression of bitcoin, and not many people use it.
Because in the bull market in late 2017, many people made a lot of money from bitcoin, showing off in many places, and leaving a bad impression on society. After entering the bear market in 2018, Bitcoin is not particularly reliable as an investment product.
Jia Xiaobei: In Japan, are there any other digital currencies that have been recognized by the state as a method of payment, such as Ethereum?
Shimura Masayuki: Except for Bitcoin, as long as the Japanese whitelisted digital currencies are available as payment methods. For example, some currencies that Ethereum, Bitcoin, Ripple, Bitcoin and Ethereum diverge from, as well as NEM, a popular currency in Japan, and some small currencies in Japan, there are about 20 currencies in total.
Jia Xiaobei: The Japanese government's supervision of the blockchain seems to be very detailed and strict at present, and a lot of provisions have been made in terms of supervision. Is it banned for ICO and IEO? Are there any clear terms?
Shimura Masayuki: Japan passed a bill two years ago to put digital currency within the legal scope. At that time, the Japan Financial Services Agency was very interested in this matter and actively promoted it. There are currently no explicit bans on ICOs and IEOs, and there is no particularly good law to promote them. But in April next year, a digital currency bill will be implemented, which should promote the industry as a whole.
Jia Xiaobei: How did some major Japanese banks react when they heard that Facebook was about to issue Libra?
Shimura Masayuki: I left the bank three months ago. When Facebook released this news, I also discussed the issue as an executive at the bank. The result of the discussion was that it was a difficult concept to implement. But when we saw some credit card banks such as VISA and Master join in, we were very shocked.
Facebook's release of Libra, no matter how they define it, is actually Facebook's act of issuing currency.
Let me talk about what currency is. Money has three functions, one is measuring value, one is preserving value, and one is transferring value. The job of the bank is to ensure the stable circulation of currency and the value of currency. This is also a very important function of the bank, and it must be subject to strong supervision by the financial management department. If Facebook is doing currency-related work, it will definitely be regulated. Libra, which has all three functions of the currency, is difficult to achieve without supervision. If one of the functions of the currency is removed, Libra may succeed.
Jia Xiaobei: When we heard that our country's central bank is about to issue digital currency DC / EP, how did Japanese banks react? How do you look at this matter?
Shimura Masayuki: When I heard the news for the first time, the mainstream of the Bank of Japan was still doubtful whether this matter could really land. But after I understood the concept myself, it was 100% that it would fall to the ground. The biggest difference between DC / EP and Libra is that DC / EP wants to go in the currency direction, and it is done by the central bank, which is endorsed by the government. This is to replace the previously accumulated financial rules and paper-based things with digital currencies on the blockchain. This method is the most mature and stable. I heard that Cambodia is actually preparing to issue digital currency in its own country, and some Japanese companies are also participating in some technical services. If Cambodia can do it, then China can certainly do it.