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SBI VC Trade is a cryptocurrency exchange that belongs to the SBI Group. Combining the stability of a major financial institution with innovative technology, it provides users with a safe and easy-to-use cryptocurrency trading environment.
SBI VC Trade can handle a wide range of cryptocurrency transactions, including 20 cryptocurrency brands, including Bitcoin and Ethereum, and meets the needs of a wide range of users from beginners to advanced users with a low-latency trading system and comprehensive security measures. It also promotes its Web3 business by providing the SBI Web3 Wallet and entering the stable coin business.
We spoke to Tomohiko Kondo, CEO of SBI VC Trade, who aims to be "customer-centric" by providing highly reliable services and taking advantage of the SBI brand, about the future of cryptocurrency and the outlook for the business.
Please tell us about your career and the circumstances that led to your appointment as CEO.
Tomohiko Kondo (hereinafter, Kondo): I joined SBI Holdings as a new graduate in 2007 and joined SBI VC Trade as a director in July 2019.
Prior to that, SBI VC Trade was initially operated under the name SBI Virtual Currencies and was established in 2016. It was in 2018 that we officially obtained a license and started our services.
I myself had been involved in the FX business at a company called SBI Liquidity Market within the SBI Group for a long time, and I also participated in the change in management structure of SBI VC Trade, which involved a change in business members, the acquisition of TaoTao, a competitor, in 2020, and the merger with the company in December 2021, and the integration of the systems in June 2022.
After that, I will be mainly working on improving the business through 2023, and will take up my current position in June 2023.
What do you think is the appeal of cryptocurrencies?
Kondo: Take remittances as an example. With conventional infrastructure, international remittances were slow and expensive. However, with cryptocurrencies, the speed is overwhelmingly faster and sending is possible at low cost.
In fact, we are working to popularize easy-to-use technology in the field of remittances, and the cryptocurrency XRP is already being used for international remittances to countries like the Philippines.
I think this ease of use is the biggest appeal of cryptocurrencies.
INTERVIEWER What do you think about the domestic environment (tax system) surrounding cryptocurrencies?
Kondo: Japan was the first country in the world to establish legal regulations related to crypto assets. At one time, there were voices saying that the regulations were too strict, but after the crypto asset Teraluna shock and the collapse of FTX, the safety of Japanese regulations was reevaluated internationally, and the importance of regulations to protect customer assets in particular was recognized.
While Japan's regulations are highly regarded worldwide, I believe that the current tax system for treating crypto asset trading by individuals as miscellaneous income will hinder the expansion of domestic individual investors.
In addition, I serve as the chairman of the Finance Division of the Japan Crypto Asset Business Association (JCBA), and in my activities, I have compiled a proposal to relax regulations on leverage ratios for leveraged transactions in order to create a fair trading environment in Japan.
This year, the listing of a Bitcoin spot ETF was also approved. In this market environment, we are also focusing on improving the environment surrounding crypto assets in Japan.
Please tell us about the challenges facing cryptocurrencies.
Kondo: One institutional issue is that crypto assets cannot be included in ETFs under the current system. Crypto assets are not included in the scope of specified assets, which means that the government does not consider crypto assets to contribute to the asset formation of the people.
It is difficult to change the system in just a year or so, but in the past, when a gold ETF was approved, the trading volume increased sharply, so I feel that there is a need to promote reform of the investment system in Japan.
What are the strengths of SBI VC Trade?
Kondo: SBI VC Trade was a latecomer to the cryptocurrency market, but we have the unique feature of aiming to provide a service that allows not only buying and selling, but also management.
In particular, our staking service handles 10 brands, making us the No. 1 in Japan in terms of the number of brands handled. We also offer lending services, and a major strength is that we can trade leveraged cryptocurrency without using Japanese yen, which is a service only offered by two other companies in Japan.
In addition, we have introduced a service where customers receive a funding rate instead of a leverage fee, like FX swap points.
This is a service unique to the SBI Group, and by combining, for example, a spot purchase of Ethereum with a leveraged short of the same amount, it is possible to make a profit while avoiding the risk of price fluctuations.
In the current market environment, spot staking can earn a profit of just under 3% per year, and leveraged trading can earn a profit of about 5% per year, which means that a relatively stable return of about 8% can be achieved, making it an attractive asset management solution.
We are proud to be the strongest cryptocurrency exchange in the asset management category. While you are of course welcome to use the service for trading, we would like you to take advantage of the safe asset management environment that SBI VC Trade provides, which allows you to invest with peace of mind, and increase your deposited assets.
I believe you also hold a Type 1 Financial Instruments Business license. What are your plans for the future?
Kondo: Cryptocurrency derivatives trading, especially futures trading, requires a Type 1 Financial Instruments Business license.
Currently, there are 32 cryptocurrency trading companies in Japan, but only a small number of them hold this license.
Maintaining a license requires a significant amount of capital, which is why many companies are withdrawing from this field.
While we are working to relax regulations on leverage rates as mentioned above, we are also preparing to be able to meet market needs in the future, such as by offering advanced services such as options trading in cryptocurrencies.
Please tell us about the specific functions of "SBI Web3 Wallet"
Kondo: The "SBI Web3 Wallet," which we launched in January last year, allows you to purchase NFTs in Japanese yen, and we have designed it to be easy for users to use.
In addition, SBI Holdings will be sponsoring the 2025 Osaka-Kansai Expo, and plans to distribute NFTs to visitors, using the technology of SBI Web3 Wallet.
SBI Holdings also has SBINFT. Could you please tell us if there are any possibilities for collaboration with SBINFT in the future?
Kondo: We started with Polygon as the chain we are using, and are now supporting Ethereum, as well as Oasis. We are also looking to add Avalanche in the future. We would like to integrate these chains with the marketplace.
If NFTs with utility are created in the future, or if NFTs with practical uses start to be used, are there any challenges that will arise?
Kondo: A feature of the Web3 wallet is that it is designed to be operated without having a key, but as a result, we strictly limit the locations where it can be used.
It is only available after thorough testing in advance, so you may feel some inconvenience, but the benefit is that it can be used safely and easily in permitted locations. This wallet has a high level of security, and we will continue to work to ensure that users can use it with peace of mind.
What are your thoughts on the current travel rules?
Kondo: In Japan, the Travel Rule was implemented, and rules were established to check customer information when sending and receiving crypto assets, and if there are no problems, transactions can be made.
However, solutions that comply with the Travel Rule have become polarized in Japan, making it difficult to exchange between different solutions. This has led to a situation where the original free transfer of crypto assets is restricted.
The Travel Rule aims to combat money laundering and terrorist financing (AML/CFT), but it has also resulted in inconvenience.
This year, we plan to introduce the Travel Rule solution "TRUST", which is used by major domestic crypto asset exchanges, and this is expected to make domestic transfers smoother.
We aim to play a role like a major hub for domestic crypto assets. We believe that in April we will be able to announce the launch of a service that will eliminate the division caused by polarization.
You also announced a partnership with Circle in the U.S. Could you tell us more about your stablecoin offering?
Kondo: We partnered with Circle, Inc. in the US, in December last year. SBI VC Trade aims to obtain a license for electronic payment instruments and other transactions, and by obtaining this in addition to a license for cryptocurrency exchange, we plan to launch a service that enables trading, storage, and even mutual sending and receiving of USDC.
We expect to start providing the service as early as this summer. The greatest advantage of USDC is the ease of transferring value globally.
Domestic remittances can be easily made through bank transfers and XX Pay, but overseas remittances still require a bank.
We believe that the demand for stablecoins is increasing against this background, and we are working to build a remittance and receiving service through our partnership with USDC.
In this regard, the scope of use of domestic stablecoins is currently limited, and we believe that the challenge is how far their use overseas will expand in the future.
On the other hand, USDC's appeal is that it can be widely used globally at present, so our strategic goal is to create an environment in which USDC can be used domestically.
What are your future prospects?
Kondo: SBI VC Trade has accelerated the pace of improving and upgrading its services, especially since last year, and has even launched some services that are being offered for the first time in Japan.
We would like to utilize what we have learned from our business in the FX market to provide services that can be used by those considering long-term investments and beginners alike.
We will rapidly expand our services and business so that we can become a central player in the domestic cryptocurrency field.
Tomohiko Kondo
President and CEO of SBI VC Trade Co., Ltd. He joined SBI Holdings as a new graduate in 2007 and was in charge of the SBI Group's information systems. He then worked in the group's electronic payment business before serving as the systems executive at SBI Liquidity Market, which operates a foreign exchange-related business. Since assuming the position of director at SBI VC Trade in 2019, he has been working mainly on cryptocurrency and Web3-related businesses in his current position. He graduated from the SBI Graduate School of Business Administration in 2016.
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