Startale’s Vision for the Future of Onchain Finance in Japan & the World

Transcript

[music] >> Thank you very much for having me and your time in your Saturday night evening. And this turn out to be the last session of the day. So let me here to deliver the wrap up the sessions. And actually some of the session contents might be overlapping with the latest speakers. But again, I would say to you we have a tremendous opportunities moving forward. And I'm more than happy to talk about the future and of the on-chain finance in Japan and in the world.

Before moving over to the contents, I would like to briefly introduce myself. My name is again Takashi Tezuka. I'm the CEO country manager and Statemint Japan. As I put here, my back then, my career actually started from the traditional finance world. I used to be working in the city, Shinsei, HSBC, and making a transition to the Web3 tech platform, Google and ByteDance, managing TikTok. Then I'm here. So the I'm

in the position being able to speak about the transitions from the Web3, traditional finance to the Web3, crypto finance, on-chain finance. Let me first of all, let me briefly talk about what Statemint is all about. Statemint is a company established in the 2023 by the Asada Watanabe, very young, motivated, passionate leader, uh leader.

And we now operate in the six global offices with around the 70 people. Uh we now have the three major partnerships with the Yeah, partners and client enterprises. One is with the Sony. Uh we now have the developed and launched the Ethereum layer two web chain blockchain called the Sony, which is very dedicated to the entertainment gaming partners.

The other one is still with the SBI. SBI is one of the largest Japanese financial conglomerate. And we collaborate with the SBI and launched the Japan and Asian dominate denominated stable coin JPYC. And we are now collaborating to develop the finance dedicated layer one blockchain, which is called the Stream.

Uh this is basically what I would like to cover today. One is we now see the governance needs to be implemented in the on-chain finance. We see the integration of the traditional finance and the on-chain finance. That's the one. And second thing is now the things are moving from the quantity to the more of the qualities. In the past, issuance tokenizing itself mattered, but now the it is more on the how the tokenized asset as well as the stable coin to be actually utilized.

And I would like to also touch upon the legal implications based upon what's happening in the US and also what's as well as what's happening in Japan. And also the I would like to discuss some good use cases, two from the US, the one from the Japan, which can be the benchmark on the how the successful business model in the on-chain finance would look like.

Yeah, first of all, let me briefly talk about stable coin market. Probably in this could have been the touch upon by the other speakers as well. But in in a nutshell, what I was saying is we have seen a tremendous growth over the last few years. It is started from the 113 billion. Now it is now coming to the 300 billion USD. And over the last few years, we see the saturation in the market, but we do not need to worry because according to the forecast being made by the financial institutions such as City, the market cap will be dramatically

increased over the next few years by the 2030. According to the official forecast, it will be going up to the 4 trillion USD from the current level of about 300 billion. And actually what's driving this? This is the best upon the use case as I mentioned. Now it is more focusing on being focused on the velocity of the assets being driven by the use case, which I will be elaborating in the later slides. And with regard to the tokenizations, I guess this can be a little overlapped with the my previous present previous presentation made by the Kobashi of the Securities.

But now the market cap is around the 13.9 billion. But according to the very very bearish forecast made by the Boston Consulting Group, BCG, it will expand up to the uh 16 to 16 trillion by the 2030. And actually the market as the Coinbase I mentioned, market is driven by the few major players. They are really focusing on the tokenized treasuries as well as tokenized money market funds.

Like the Hashnote acquired by the Circle and BlackRock. And the Franklin Templeton's ventures. So these are the major players currently driving the market in terms of the treasury tokenized treasuries as well as the tokenized money market funds. Let me talk about the very specific use case on the these players. What then they are doing is as follows. Basically they are major clients, investors at the institutional investors.

And they holding US DC. And they rotate the US DC into the tokenized treasuries or the tokenized money market funds. Then they they collateralize institutional investors they collateralize this thing fund tokenized the funds or treasuries which goes with very good credit rating. So meaning that they should be able to the manage the head count risk. And then they collateralize these the assets and they do the OTC derivative transactions. This is the how it works.

We now see the very good sequence deep of the um stablecoin and tokenized asset and also the collateralizations and also the high yield transactions. Actually these are the typical playbook in the world of the crypto combining the stablecoin and tokenized assets. Uh, yeah. I guess some of them are you are in some of the US. So, the you might know the better than decent me regarding the decent to development.

Nobody what's happening in the US from the regulatory and legal standpoint. Uh, yeah. Definitely in terms of the stable coin, we already have the very good governance in place. Only the permitted issuers can issue the stable coin. We do have the very good compliant framework. AML, KYC, wire about as well as the solvency margin things. So, the we already have the good infrastructures. We recently got to the in stable coin thanks to the genius act.

Uh, as you know, the one major drawback question the clarity in the act. You know, Democrats reject the bill. And the shoes disappointment came through last week. But the the message I would like to uh, uh, give it you give to you next thing. We shouldn't really be too much over accent that. Because the point I would like to make next thing yeah, basic template defined being defined by the clarity act is already there. Uh, so the right after the bill was rejected, you know, SEC and

yeah CFTC made some announcement to the making of most of the you know, innovation exemptions. And one example on the SEC made announcement to uh, give a relief to the you know, tokenized stock with the some of the conditions. So, the I would say the you know, even so the bill itself was rejected by the Democrats, we already have the basic infrastructure is there. Basically, the, uh, direction is there, uh, which uh, cannot be, uh, reversed, uh, because the, uh, regulatory bodies uh, taking now started taking the individual

actions. The other interesting thing about the, uh, regulation is the only uh, perpetual decks. Uh, as you know, uh, Trump administration they made announcement uh, to the make the perpetual decks are legal, uh, in the 2027. And it it isn't because the, uh, perpetual market, uh, it is becoming already a too big uh, too big to be ignored. Uh, according to the DeFi Rama, uh, 7 uh, billion USD uh, transactions were uh uh perpetual transaction uh, needs to uh, being processed uh, by the hyper liquid.

In 24 hours. 7 billion USD in 24 hours. So, they're already too big to ignore. Uh, so that's the reason why the, uh, you know, governments uh, needs to jump in and uh, try to uh, put in uh, uh, governance uh, by the, uh, institutionalizing the stable market. And let's also let talk about the what's happening in Japan. Uh, in Japan, uh, like the LG in a sec. Uh, we already have the, uh, basic infrastructure there. Uh, we already have the, uh, uh, payment services act. And we already have the pretty much a good

governance regarding the stable coin. And we now have the, uh, two or three layers uh, in Japan. One is the JPYC. Uh, JPYC uh, first uh, launched the stable coin in Japan, uh, denominated in yen. Uh, the second one is the JPYC. Uh, this is the ours. Uh, this is the stable coin uh, launched uh, through the collaborations between the, uh, SBI uh, as well as the start up. Uh, And supporting JPYC, we now go listing different payment service scheme meaning that we already have the any limitation with regard to the amount of the transactions. For for your

reference JPYC has a cap on the transaction amount transaction amount per transaction which is 1 million. So this is very difficult for the institutional partners to adopt in a JPYC, but then JPYC is not a case for us. Yeah and uh stable coin is the one and for the crypto other crypto assets we government already made a disclosure plan implemented in the decision that the uh crypto asset will be the regulated under the if I EA financial instruments the exchange act. So then basically the

crypto industry will go through the same disclosure compliance wasting other than security assets. So the basic yeah infrastructure and is already set from the legal regulatory standpoint. And also the taxation point standpoint government made a would amending taxation policy in the past. Yeah we needed to go through the liberal we need to go through the progressive taxation scheme meaning that up to the 50% of the

you know capital gain needs to be the tax and but after the change of the law it'll be changed down to the 20% because it'll be the treated separately regardless of the income of the users. So that'll that'll be the major improvement in the market. And also the RWA and security tokens in Yeah, security tokens are also the regulated under the FIA. And we already have the 70 basic rules infrastructures for distributions. So, basically Yeah, it is already getting there. Of course, there's still a need to define the

change of law because currently Yeah, for instance, some of the FIA subject assets cannot be really transferred or they tokenized because we have a still have a regulation that which will definitely needs to be the changed in the future regulation revisit. Yeah, and I would like to talk about in three cases of from the US and this or another case of from Japan. I'd talk about the Coinbase and the Robinhood.

Coinbase now go racing vertical integration strategies. They have been up which means the Coinbase the word. Also, they they have been a USDC as a currency and then all of their service all apps are being operated on the base chain. And the back end, they also have a collaboration with the DeFi protocols such as the Mover. So, you know, they already already web on chain finance already being implemented. But in the end, the users they really do not know the whether they are just using the crypto because the UX is so natural and seamless. And in terms

of the HyperLedger, they now go with the two lanes. One is the KYC based lanes. The other one is next to the non-KYC lanes. As you could tell, since the they launched the Loom network chain which means the non-KYC lane, they see the substantial growth of their business over the last couple of the two since the launch. So the basic point is the regulatory KYC and other regulation combined is necessary. But there is a use to deal with making the most of the blockchain web 3 technology backend.

And SBI needs to also be advocating the virtual vertical integration. This is the basic concept being announced by the other CEO Mr. Kitao San. And they already tried to find financial conglomerate. But they already have a money which is PYC. And we are now developing a chain which is the stream. They have the distribution network. And they have the trust bank which is SBI Shinsei Trust Bank. And they have the all the products.

So basically they are aiming to achieve the vertical integration and becoming the Japanese version of the Coinbase. Yeah. So then this will be the last slide. And the key thing I just wanted to call out in this thing on chain finance needs to already be coming the partner of the regulated financial architecture structures. In the past crypto traditional are totally disjointed and they didn't really integrate with each other. But now things are changing because it is not because thing you know traditional is totally changing to the

DeFi crypto. While crypto side needs to overcome overtake the traditional finance. It is the both side actually trying to meet in the middle leveraging the technology innovations which is basically the presentation of the crypto and the web 3. So the actually as I put here, uh, the opportunity needs thing uh, regulation and compliant US UX. Uh, plus the open ways. So, then the the uh, key drivers uh, enable us. One is the regulatory uh, platform. Uh, the other one is the programmable assets as represented by

the uh, you know, crypto. The last but not least uh globally openness. Uh, so I call it RBG. Uh, regulated platform and programmable assets and global openness which is represented by the web 3. Uh, so actually these three will be the key enabler to the bring about the success in the on-chain finance. Yep, that's pretty much in the formal presentations. And uh, thank you very much for the listening and I hope you will enjoy the rest of your weekend in Tokyo. Thank you very much.

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