The Japanese government’s crypto, blockchain czar is highlighting the nation’s Web3 capabilities

Speaking at the NexTech Week trade show in Tokyo on Thursday, Masaaki Taira, a lawmaker in the ruling Liberal Democratic Party and head of the Web 3.0 project team, said Japan has seen the future — and it’s blockchain.

Taira – an outspoken proponent of cryptocurrency – used his presentation on national strategies for emerging technologies to highlight Japan’s opportunities in Web3, or the vision of a new Internet built around decentralized blockchain technologies, the metaverse and non-fungible tokens (NFTs).

“While other jurisdictions are trying to regulate an area that is not yet fully understood, Japan already has a relatively good understanding of what it is we are trying to promote,” Taira said, adding that global technology companies are taking note.

Japan’s government and Prime Minister Fumio Kishida have become enthusiastic supporters of emerging technologies, and Web3 in particular, as pillars of the country’s economic future. This at a time when American cryptocurrency exchanges are hit by lawsuits that generate regulatory unrest and doubts about the country’s Web3 future.

In contrast, a Japanese government-affiliated white paper released in April outlines the country’s path to widespread use of Web3 that includes crypto. The document has become a “big talking point” in Japan and abroad in the weeks since it was released, Taira said.

“Recently, executives from Microsoft, Amazon, Meta and various other companies have visited Japan, including an Apple executive who came to Japan today,” he said. “It’s basically about them reading the white paper, traveling here to meet us and coming up with a number of new proposals.”

Proceeding

Until the government’s pivot towards crypto and blockchain began to gain momentum at the beginning of this year, there was a sense that the Japanese digital asset space was stagnating.

Despite Japan’s status as an early adopter of crypto, the collapse of Tokyo-based crypto exchange Mt Gox in 2014 followed by a hack of the Coincheck exchange and the loss of hundreds of millions of dollars worth of cryptocurrency in 2018 undermined confidence in the industry.

A deregulation followed and much tougher rules were imposed on crypto trading platforms by the Financial Services Agency, which saw some exchanges leave the country, including Binance in 2018.

But when the FTX exchange collapsed last November due to allegations of fraud and customers around the world lost huge amounts of savings and investments, Japan’s FTX customers were cornered and their money is in the process of being returned.

“Japan’s cryptocurrency exchanges are the safest in the world,” Taira said. “From our point of view, it is hardly possible to separate the company’s and the customers’ assets throughout the whole FTX affair.”

He also pointed to other developments.

Japan’s experimentation with stablecoins is bearing fruit, he said, with the government advisory body he oversees investigating ways to connect public and private blockchains for greater scalability.

Elsewhere, Japan’s historical soft power strengths in anime, manga and games lend themselves well to the Web3 space, he said, particularly in the realm of NFTs and metaverse development — two areas full of potential value that have yet to be adequately explored, he said .

Youth exodus

On artificial intelligence, another main topic at the NexTech Week fair, Taira said capital investment is needed to boost experimentation and encourage the country’s young developers to establish themselves in the country, rather than going abroad.

Mistakes had been made in the past in nurturing Japan’s talented young entrepreneurs and innovators, he acknowledged, leading many to seek more favorable conditions in places like Dubai and Singapore.

“I want to create a system that will allow young researchers and start-ups to access and utilize increased resources under improved conditions,” he said.

That will include ironing out a “number of tax issues” that remain a final barrier to increased development, he said.

The final day of NexTech Week is on Friday, with two young entrepreneurs from blockchain platform Financie Inc. and J1 League soccer team Avispa Fukuoka to discuss their experience working in Web3.

The duo run the Avispa Fukuoka Sports Innovation DAO (decentralized autonomous organization), which is designed to introduce global fans to the soccer team of a city that has emerged as a tech startup hub in Japan.

Their presentations should help the audience get a better sense of whether Taira’s efforts so far are bearing fruit.