Kei Oda, the head of Japan and the Asia-Pacific region for Quantstamp, a Web3 security firm, has had an interesting journey into the world of cryptocurrencies. After spending 16 years as a bond trader at Goldman Sachs, Kei stumbled into cryptocurrencies out of boredom. He was drawn to the ability to trade Bitcoin and other assets around the clock. What started as a way to pass the time quickly turned into a fascination with the value proposition of cryptocurrencies and their potential to be game-changing.
When asked about the current Japanese crypto ecosystem, Kei believes that Japan has a vibrant and progressive ecosystem. Despite the setbacks of the Mt.Gox and CoinCheck hacks, Japan has embraced cryptocurrency, allowing Bitcoin to be used as a payment method. Kei also highlights the growing interest in security tokens, which is particularly exciting for Japanese financial firms.
However, Kei also acknowledges that there are some obstacles holding back the Japanese crypto scene. One major issue is taxation. The current tax regulations in Japan are not very friendly for crypto startups and traders. Profits from crypto trading are taxed as extraordinary income, with rates as high as 55%. This is in stark contrast to countries like Singapore and Hong Kong, where tax rates are much lower. Kei believes that this high tax burden is deterring some companies from setting up in Japan and opting for other Asian hubs instead.
Despite the tax challenges, Kei believes that Japan still has a lot to offer as a crypto hub. The Japanese government is actively working to attract talent and has plans to introduce digital nomad visas. The large market size in Japan is also appealing to startups looking to capture market share.
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In order to foster a more dynamic and engaging crypto community, Kei has taken matters into his own hands. He co-created an event called Tokyo Blockchain Night, which offers a casual and open environment for like-minded individuals to network and discuss crypto. This event aligns with Quantstamp’s ethos of helping and paying it forward, with the hope that something positive will come back in return.
The recent collapse of FTX had an interesting impact on the Japanese market. FTX had a subsidiary in Japan called Liquid, and because of stricter regulations around asset custody, the Japanese entity remained fully liquid and solvent. As a result, Japanese customers of FTX were able to recover their funds, while customers of FTX International faced more uncertainty.
Overall, Kei is optimistic about the future of the Japanese crypto scene. Despite the challenges, Japan is taking steps to attract talent and foster innovation. With a vibrant ecosystem and a large market, Japan has the potential to become a leading crypto hub in the Asia-Pacific region.
