Japan FinTech Observer #3
This week's content:
“There are decades where nothing happens; and there are weeks where decades happen." Maybe someone will argue that the tags "lenin, marx, revolution" do not mix well with "blockchain, dao, web3", but if we are ever going to use a Lenin quote, then after a week like the past one, that featured both ETHGlobal Tokyo ?and?DAO Tokyo , as well as an infinite number of side events. But first...
JETRO FinTech Market Map
The Japan External Trade Organization (JETRO) has published eleven market maps spanning different industry sectors, and FinTech is one of them. It includes about 135 Japanese startups from the following 7 fields:
Going forward, we will combine this market map with the information generated from the various startup pitch contests this spring - please give us a couple of weeks to get this done.
ETHGlobal Tokyo & DAO Tokyo
Did we mention that both ETHGlobal Tokyo ?and?DAO Tokyo took place last week? We actually did not attend the former, so will point you to the impressive showcase list of projects the hackathon produced. Someone mentioned 1,000+ developers and 300+ mentors/sponsors participating.
DAO Tokyo took place on Thursday, prior to the hackathon. A whole day of talking about Decentralized Autonomous Organizations, even if taken from different angles, makes it unavoidable that some of the points made become repetitive. How often can you discuss transparency? A lot, apparently.
Regardless, for someone like me who wanted to catch up with the leading edge in that domain, it was a productive day, with quite a few follow-ups to learn more about specific projects or technologies. Where the rubber hits the road, however, as the LDP web3 white paper we discussed last week so wonderfully recognized, is when the technical implementation of a DAO hits the wall of current legal entity structures. This is where ownership, liability and taxation come into play. Do you create a DAO as a limited liability company, a partnership, or a co-operative? DAO dreamers would want the "no liability company", but that will go nowhere, just like "no liability, no regulation crypto exchanges" did not fly. So this gap will need to be bridged eventually.
On Friday, DeFi Tokyo hosted "Derivatives, Leverage, and Real World Assets", featuring Cega , Quantstamp, Inc. , dYdX , Infinity Pools, and Secured Finance AG . The event drew over 700 registrations for a space accommodating 100 people. Let's just say we got to know each other really well.
Thankfully, we got there early and recorded most of the sessions for you. With some magic to reduce the background noise, we will publish the videos on the Tokyo FinTech YouTube channel in the coming days. The first video is the introduction to Cega by co-founder Winston Zhang above. The DeFi derivatives space has attracted quite a few former investment bank traders, so it has an almost "institutional" feel to it, and the language used is a little more familiar for those coming out of traditional finance.
Financial Action Task Force (FATF)
The FATF’s Virtual Assets Contact Group (VACG) meeting and its private sector outreach were held in Tokyo on April 12th – 14th, hosted by the Financial Services Agency, Japan (JFSA, 金融庁) . Japan has chosen strengthening AML/CFT/CPF measures for virtual assets as one of the priorities of the Finance Track under its G7 Presidency this year. VACG?leads the promotion of?global implementation of FATF Standards on virtual assets, including engagements with the private sector.
The VACG discussed the topics below and agreed that it is important for the FATF and for each jurisdiction to continue promoting effective implementation of the FATF standards on virtual assets and to monitor and to explore responses to emerging risks and growing threats.??
Tokyo FinTech Meetup
We were also back with our own in-person Tokyo FinTech Meetup this week, featuring NFTify and Sodaex by Crafters Japan (クラフタスジャパン) .
领英推荐
NFTify is the Shopify for NFT. An All-in-one Platform to fuel the rise of NFT Economy. NFTify allows small businesses to create their own NFT marketplace without coding; helps NFT authors issue NFT easily and detect fake/similar content for copyright protection purposes; provides NFT collectors with a platform to transact at a much lower cost.
Sodaex is a crypto yield services operated by Crafters Japan, which in turn is a joint venture between Cocone , Post Voyager and Block Crafters Co., Ltd. . Sodaex launched at the end of March in Japan, and offers yields based on the term (30, 90 or 365 days) committed to, and the asset (Bitcoin, Ethereum, Ripple) deposited.
Sodaex generates the yield through arbitrage trading (leveraging BTC and ETH price gaps between crypto exchanges), market neutral trading (based on the price stability mechanism at futures exchange), and calendar spread trading (focusing on the volatility of BTC/ ETH futures contracts). Sodaex aims for low risk/medium returns.
Our next event will be an online webinar on Thursday, April 27 , featuring payment innovation in Japan with Smartpay . Please join us!
Venture Capital
Mizuho Financial Group has established "Mizuho Innovation Frontier" (MHIF) as its corporate venture capital arm. 40 years old Junichi Ikeda, the youngest-ever director appointed in the Group, will lead MHIF.
As the Nikkei reported, MUFJ Capital will set up investment funds totaling JPY 50bn (USD 375m) . The Group had established MUFG Innovation Partners (MUIP) as their corporate venture capital arm, tasked not only with financial objectives, but also with seeking synergies with investee companies for the Group. Subsequently, MUFG has notably kept its Ganesha Fund for Indian startups outside of MUIP, while its Garuda Fund for Indonesian startups is managed from MUIP. The scaling up of MUFJ Capital hints at the expected increase of investment opportunities into domestic startups that the government's plans project, and at primarily financial considerations for the investments.
Banking
In other banking news this week, SMBC Group has been pushing the boundaries, twice! It became the first of the mega banks to announce a deployment of generative AI , by virtue of its alliance with Microsoft, which in turn invested in OpenAI (i.e., ChatGPT). The aptly named "SMBC-GPT" runs on an SMBC-dedicated instance of Microsoft Azure to avoid data leakage. Later in the week, MUFG and Mizuho made similar announcements with their respective partners (please see graphic above).
Last December, 三井住友银行 entered into a basic agreement on a business partnership with 株式会社HashPort and its consolidated subsidiaries HashPalette and HashBank. This week, SMBC issued a further press release, stating that the first phase of their implementation will verify the technical matters related to the issuance and holding of Soulbound Tokens (SBTs) and accumulate know-how on community formation with SBTs.?
We have previously written about "The Race for South East Asia". Credit Saison Co., Ltd. is now pushing the boundaries as well, but in a more geographical sense. In its search for growth abroad, it has announced the formation of entities in Mexico and Brazil that will partner with local players to establish a lending business in Latin America .
Reuters reported that Rakuten Bank priced its IPO at JPY 1,400 per share , the top of a JPY 1,300 to JPY 1,400 range. That values the offering at about JPY 83.3bn (USD 624m), excluding a "greenshoe" option of additional stock. Rakuten Bank will commence trading on April 21.
Goldman Sachs ?made the news this week as they are ready to start their Transaction Banking business in Tokyo, based on the banking license they have obtained almost two years ago .
The last word
At the Japan FinTech Observer, we take cybersecurity seriously. DAO Tokyo took place at Kanda Myojin Shrine, quite close to the Akihabara "Electric Town", and the shrine has developed a thriving business selling special purpose lucky charms. So we took a bundle of yen and invested heavily in IT security. We are now protected for one year, including our laptop and mobile phone. Please do not worry about clicking on any links in emails from us, everything will be fine.
If you would like to see more of our content, please head over to the?Tokyo FinTech YouTube Channel ?or check out the?eXponential Finance Podcast .
Have an awesome week ahead!
Proficiency in various therapeutic techniques to address mental health issues, such as cognitive-behavioral therapy, motivational interviewing, or solution-focused therapy.
1 年Great, do you care for collaboration?
Market Structure & Technology Specialist @ Snowflake (ex-Symphony, ex-GS) | 金融市場?テクノロジースペシャリスト / 金融マーケットインフラ?オタク
1 年Great stuff and great to see you this week!
Next Trend Realty LLC./wwwHar.com/Chester-Swanson/agent_cbswan
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