The Fusion of TradFi and DeFi: Unveiling the True Value of On-Chain Finance — An Interview with Taisuke Isono

Key Points of This Article

1. Establishment of the DeFi Technology Department
SMBC Nikko Securities has established the DeFi Technology Department to promote the fusion of TradFi and DeFi. By positioning stablecoins as a bridge between Web2 and Web3, the aim is to build a new on-chain finance system that leverages the essence of existing finance.

2. Architects of Regulation
Through pilot projects and discussions with regulatory authorities, the department demonstrates a commitment to leading the construction of regulatory frameworks for Web3. It leverages the strengths of securities firms in compliance and the ability to translate complex Web3 concepts into understandable terms for clients.

3. On-Chain Transformation of Major Assets
By advancing the full on-chain transformation of major assets such as stocks and bonds, global liquidity is created. With a backward-thinking approach from the future of 2030, infrastructure development and the implementation of AI on blockchain are accelerated.

── The DeFi Technology Department has been newly established. Could you tell us about the background and internal decision-making process that led to its creation, and as the inaugural head, what initiatives do you plan to lead at the forefront?

Taisuke Isono (hereafter, Isono): The DeFi Technology Department was launched in February 2026, but we had already been working on Web3 initiatives within a department called the 'Nikko Open Innovation Lab (NOIL).' This department primarily focuses on accelerating new business ideas selected through our internal venture program, essentially handling the '0→1' acceleration.

In recent years, it has become evident that the characteristics of blockchain are highly compatible with financial services, and discussions on regulating cryptocurrencies under the Financial Instruments and Exchange Act have progressed. Therefore, while valuing our previous efforts in non-financial areas, we decided to strengthen our 'essence as a financial institution.'

The DeFi domain is a new frontier for us, and we became convinced of its potential, especially after the surge in AI-driven investments around late 2024.

Amid such significant regulatory changes, the decision was made to establish a standalone department focusing on blockchain business areas that handle the essence of finance, leading to the creation of the DeFi Technology Department.

── Generally, payment systems using stablecoins are noted for potentially reducing remittance costs to around 0.1% by eliminating intermediary organizations, compared to traditional international transfers (costing about 0.5% to 1.5%). How do you assess the cost-saving impact and societal influence of stablecoin payment infrastructure?

Isono: As a premise, I believe stablecoins have two major roles.

One is their role as an 'electronic payment method.' As you pointed out, the practical need for payments that significantly reduce costs by eliminating intermediaries and increase remittance speed is undoubtedly present.

The other role is as digital money linked to fiat currency value, serving as a 'bridge between Web2 and Web3.' It's quite challenging to engage in on-chain financial activities like DeFi investments while holding fiat currency.

In the future, I envision a world where TradFi (traditional finance) and DeFi merge and develop as a whole, and stablecoins play a crucial role as a bridge connecting the two.

How these elements permeate society will largely depend on how these two aspects are needed and understood in the industry.

The common feature of both is that they are 'on-chain assets.' Currently, companies are at the stage of recognizing on-chain assets on their balance sheets as a new risk. However, as the merged worldview permeates, the idea of 'risk diversification between on-chain and off-chain' is likely to emerge in the future.