Creating a 'Capital Cycle' Between Digital and Real Assets: Fintertech's Vision for Next-Generation Digital Asset Stock Business—Interview with Keishi Kamiwaki

Key Points of This Article

1. Resolving High Tax Burdens and Advanced Governance
In Japan, the sale of cryptocurrencies incurs a tax burden of up to 55%, a challenge for investors. Fintertech offers Digital Asset Secured Loans that do not require asset liquidation. With governance based on an average of 18.5 years of financial experience, the company has gained high levels of trust and reassurance.

2. Convenience and Capital Cycle Creation Through Yen-Denominated Transactions
The asset utilization service introduces yen-denominated payments for loan fees to avoid complex tax calculations. This creates a capital cycle between digital assets and the real economy, contributing to comprehensive asset consulting in collaboration with Daiwa Securities.

3. Shift to Stock Business and Expansion into RWA
As the cryptocurrency market transitions from flow to stock business, Fintertech is expanding its operations centered on secured loans. The company aims to include tokenized assets such as bonds (RWA) in its portfolio, driving next-generation financial innovation.

──The environment surrounding cryptocurrencies is rapidly changing both domestically and internationally. Given this situation, how do you see the role of cryptocurrencies evolving in Japan?

Keishi Kamiwaki (hereafter, Kamiwaki): I believe that the mass adoption of cryptocurrencies as a new asset class will progress, albeit limited to a few major tokens.

A significant turning point will be the listing of cryptocurrency ETFs in Japan, similar to the U.S. Although Japan is lagging behind, regulatory changes such as the transition of cryptocurrencies under the Financial Instruments and Exchange Act and amendments to government ordinances are expected to finally allow domestic institutional investors to access cryptocurrencies like Bitcoin (BTC) within the framework of existing investment products (ETFs).

Individual investors will also have the opportunity to access cryptocurrencies by purchasing ETFs through existing securities accounts. With the introduction of cryptocurrency ETFs, a new tax regime is expected to be applied, likely reducing tax rates on profits and improving convenience through measures like loss carryforward, which will increase interest in cryptocurrencies.

Furthermore, as the term 'cryptocurrency' has evolved to 'crypto assets,' Bitcoin will likely be discussed more as an alternative asset like gold rather than as a payment method.

──The amendment of the Financial Instruments and Exchange Act, which is being discussed domestically, is expected to impact many businesses. How do you foresee this affecting Fintertech after the transition?

Kamiwaki: Currently, we offer the 'Digital Asset Secured Loan' service under the Money Lending Business Act, as well as the 'Digital Asset Stake (Consumer Loan)' service. Since both services involve 'borrowing cryptocurrencies,' we anticipate that obtaining a license will be necessary following the amendment of the Financial Instruments and Exchange Act.

──Fintertech was established as a joint venture between Daiwa Securities Group and Credit Saison. How do you leverage the strengths of both companies, and how does this benefit your users?

Kamiwaki: The 'Digital Asset Secured Loan' we currently offer is positioned as the 'crypto asset version of the securities-backed loan' provided by Daiwa Securities. In other words, we bring existing financial products and schemes into the digital asset space and offer them to our customers.

Our internal resources are composed of personnel seconded from Daiwa Securities and Credit Saison, with an average of 18.5 years of experience in financial institutions. Therefore, our business is supported by advanced knowledge and experience in areas such as risk management and compliance at the level of traditional finance.

While operating under the strict governance of traditional finance may make us less agile compared to venture companies, the solid protection and governance we provide offer significant reassurance to our customers.

Moreover, having been in business for six years in an industry where Bitcoin has existed for about 17 years, we are considered a 'veteran' in this field, which also contributes to our credibility.

Additionally, as a characteristic of a securities company group, we have former sales traders of Japanese stocks and former branch sales staff as sales representatives. This allows us to engage in conversations that incorporate the market conditions of traditional finance, which is a unique feature of our company.

──As mentioned earlier, while Daiwa Securities offers a standard 'securities-backed loan,' how is the 'Digital Asset Secured Loan' positioned, and how is it differentiated?

Kamiwaki: Fintertech was established as a 'Dejima organization' of the Daiwa Securities Group to create and develop next-generation financial services utilizing cutting-edge technology.

Therefore, rather than differentiating by product characteristics, we differentiate by the asset domain we handle. For example, while the Daiwa Securities Group companies already handle the area known as RWA (Real World Assets) tokens, Fintertech operates in the emerging digital asset domain as the Dejima organization of the Daiwa Securities Group, with the 'Digital Asset Secured Loan' being one of our offerings.