podcast transcript

Podcast Transcript: CryptoAge Obi on Japan’s Regulatory Sentiment and its Growing Blockchain Developers Ecosystem

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In this episode, Joyce Yang from Global Coin Research is joined by Yusuke Obinata, aka Obi, founder of CryptoAge. Obi is deeply involved with the Blockchain community in Japan, and he has been helping multiple US blockchain projects go to market in Japan including Cryptokitties, Quantstamp, and Kadena. Through CryptoAge, Obi organizes frequent, large size developer meetups in Tokyo. He is also the lead organizer of NodeTokyo 2018, the first kind of blockchain developer conference in Tokyo.

In this podcast, Obi and Joyce discuss the latest regulatory sentiment towards crypto in Japan, the growing blockchain developers ecosystem and how he advises projects in the US to go to market there.


Obi 

Something interesting thing about Japanese market is that actually a lot of tech enterprises from the big like listed companies to startup interested in Blockchain and most of them have already started working on building something.

 Joyce Yang

Welcome to the Global Coin Podcast. A Podcast where we hear from leading global operators and investors in crypto with their thoughts on the Asia Blockchain and cryptocurrency space. Asia is really a cryptocurrency hub, and understanding the region is as important as understanding what’s going on locally. We also have a newsletter that highlights all the important crypto news coming out of Asia with many translated by our staff directly from the local media. Check it out at [globalcoinresearch.com

I’m your host Joyce Yang and today I am joined by Obi aka Obi founder of CryptoAge. Obi is deeply involved with the Blockchain community in Japan and he has been helping multiple US Blockchain projects go to market in Japan including CryptoKitties, Quantstamp and Kadena. Through CryptoAge, Obi organizes frequent large sized developer meetups in Tokyo. He’s also the lead organizer of NodeTokyo 2018, the first kind of Blockchain developer conference in Tokyo. In this podcast, Obi and I discussed the latest regulatory sentiment towards crypto in Japan, the growing Blockchain developer’s ecosystem and how he advises projects in the US to go to market there.  

Obi 

My name is Obi. Yusuke Obinata in Japanese full name, but people call me Obi like Obiwan from Star Wars. I’m based mostly in Tokyo and I’m the founder of CryptoAge which is the Blockchain community for developers in Japan who are excited about crypto Blockchain. I’ve been helping a lot of international Blockchain projects and communities in everything that can be the bridge between them and Japan. So I’ve been helping projects like Quantstamp, OmiseGo, CryptoKitties. I’ve also helped Ethereume foundation to set up the first big meetup which happened in Tokyo back in March which Vitalik and Gavin Wood, Joseph Poon. There were others who came to Japan and we had like 500 people joining us.  

Joyce Yang

That’s really great and I’ve been hearing about you from many different people in the States, who whenever I mentioned I want to try to better understand Japan, they tell me that “you should go meet Obi.” So I’m so glad you’re here on the show and talking to us… 

Obi 

Thank you for having me.

Joyce Yang

Yeah I know it’s great. We love to learn more about what’s going on in Japan and you being here physically it definitely will be very interesting, could you share your perspectives on what’s going on there versus what you’re seeing in the rest of the world. 

Obi 

Yes, that’s good.

Joyce Yang

Yeah. So in terms of crypto and what we’ve seen in the last 6 months in the country, what are your top kind of takeaways for our audience?

Obi 

I think Japan has been like one of the biggest crypto markets in terms of like trading, holding f the Bitcoin and like a general adoption of crypto. So that’s yeah exactly what I’ve been seeing in the past few years.

So I’ve gotten into crypto since 2014 when I was working at traditional VC firms investing in Tokyo and Southeast Asia. We’ve invested in a crypto exchange called BitFlyer, we were one of the first investors in 2014. So I’ve seen the market since then and especially until like the beginning of this year, Japan is all about trading and speculation. There haven’t been many developer communities here.

Starting from this year, I’ve seen more and more meetups or communities started being formed. And then also, I’ve started one of them and especially in the last 6 months, I’ve seen a huge growth of interest from the developers and also students who don’t really care about the price of the crypto, they’re more interested in the technology and innovative side of the Blockchain.

 Joyce Yang

That’s really interesting. It sounds like you’re saying that the market has really spurred a group of individuals who are very interested in building and developing for the cryptocurrency projects and you’re very involved with that. 

 Obi 

Yeah. Through CryptoAge, I’ve been hosting meetups for young developers and students at least like once or twice in a month starting from January this year. So every time we have a meetup, about 100 people join with us and there’re no scammers or traders. These are just people who are excited about Blockchain as a technology or like actual developers who are already building something.  

Joyce Yang

Yeah, that’s great. And you mentioned that you actually have been working with several projects from the US on finding developers and identifying talent there. Can you tell us a little bit more about that and what those projects are looking for and how you’re helping them? 

Obi

Yeah sure. It kind of started accidentally. So I started from the Quantstamp. So I met them very randomly in a bar in Bangkok almost like a year ago. So I think it was after a party at the Blockchain conference; the first Blockchain conference in Bangkok, and I’ve seen the founder of Quantstamp, Richard pitching about his project and I got interested in Quantstamp and I talked to them after the pitch and I kind of convinced them to come to Tokyo because they haven’t been coming here. So yeah and then they decided to come here I think in just like 3 weeks and that’s when I was helping them. So I brought them for the first time in Japan in January this year and then I took them around to meet some tech or traditional enterprises who have been working on Blockchain and also set up the meet up for developers in Japan, then they have found a potential in this market. So they started to open the first office in Asia in Tokyo, I think this April. Yeah, I think so.


From January, I started doing meetups with other international projects when they come to Tokyo, because like Quantstamp or some other people that Quantstamp started talking to when they see someone in crypto going to Tokyo and they’re like “okay, if you guys are going to Japan, just meet with Obi. He’s going to take you to good karaoke”.

Joyce Yang

[laugh] So you give them the whole package? The Japan crypto tour as well as an entrance into understanding better what’s going on with the community developers there.

Obi

Yeah, I think when it just started, it was just kind of a fun project because at that time, I haven’t met anything like a US project, maybe like a legit project going to Japan. And then once I was doing meetups or working with enterprises here, I was thinking like that’s something needed for Japanese markets as well. And also, it’s always fun to bring people around Tokyo from overseas.

Joyce Yang

So from what you’re seeing, it sounds like this year we’re seeing a lot of projects looking to go to the market in Japan, and I see some in Korea as well, some in China as well, but Japan sounds like a really great market to go to because you have lots of educated people who understand cryptocurrency as well as a developer community. Can you just give us an example of the level of understanding of the developers in terms of Blockchain technology and how are they learning and adapting to this technology?

Obi

One interesting thing about Japanese market is that actually a lot of tech enterprises from the big like listed companies to startups are interested in Blockchain, and most of them have already started working on building something. So a lot of developers from those tech companies are doing very extensive research within the company and those guys are the ones who are like in the core of that community here. I think their understanding of the technology is getting really well. So I’ve seen a lot of developers with like… spontaneously started translating from developer resources into Japanese and also like the DEVCON 4 which I’ve been to two weeks ago. I’ve seen around 15 to 20 developers coming from Japan just to visit DEVCON. I felt like the number of people would be much smaller, so it was surprising, and it included some more students… even high school students were there. So I think understanding the Blockchain among Japanese community is pretty high. I think that’s something that Benny from CryptoKitties mentioned in his last podcast.

Joyce Yang

Yeah, he was very excited when he went to Japan because he discovered that the community was so enthusiastic and it was unlike a lot of the other communities that he’s seeing. which I think is super fascinating and really great.

Somewhere, you mentioned… can you talk a little bit more about the enterprises and what they’re doing with Blockchain? It sounds like you know companies like SBI and even the Bank of Japan and they’re looking to do a lot more with Blockchain. If you could share more what you’re seeing there.

Obi

So I think it’s in like various fields, I think mostly in the beginning, it started from doing their own exchanges. So SBI is also working on one, also like LINE, the biggest messenger app in Japan has launched an exchange, and also like the biggest tech company here Yahoo! Japan already have plans to launch their own cypto exchange.

Other than that, I know of companies like Mercari, which is turning the biggest OTC second-hand item marketplace. They’re doing some research to bring more assets in on Blockchain, because they have already the prepay point system within their platform with like 30-40 million users in Japan.

Also, like Rakuten, which is just one of the biggest e-commerce platforms in Japan is also doing some research to bring their Rakuten points on smart contracts or making it to their own token or something. Also, you mentioned about banks. So the biggest bank in Japan MUFG; they have revealed the plans to launch a stable token, which is pegged to the Japanese Yen, which will be very interesting if it is realized. They have done like several hackathons with the Blockchain developers in Tokyo as well.

Joyce Yang

MUFG?

Obi

Yeah.

Joyce Yang

Oh wow. So they’re actively recruiting Blockchain engineers just like they were in that some of the US projects are doing in Japan as well.

Obi

I think so, and they are also very interested to talk with US projects as well. I’ve introduced them to some US companies.

Joyce Yang

It sounds like it’s a very collaborative effort and they are very open. I mean from the history what we see in Japan in terms of their approach to cryptocurrency. They’re very open, they’re very eager to learn about what’s going on and they’re also very quick to adopt for example this stable coin from MUFG which I think it’s quite groundbreaking for a Japanese bank that’s also a government-backed I assume.

Obi

Yeah. And also, the gaming industry in Japan is pretty huge. I would say that most of the online gaming companies in Japan started looking at Blockchain especially after the launch of the CryptoKitties.

Joyce Yang

They are launching other collectibles on the Blockchains as well?

Obi

Yeah or like doing very extensive research on how they can elaborate with CryptoKitties kind of like Blockchain games. Not just copy them, but also how they can make it better or make it bigger.

Joyce Yang

Yeah, and is the attitude or the approach to generally learn what’s outside of Japan and the projects in the US for example, and see which ones they could adapt themselves and which ones they should partner with other projects to deliver to the Japanese citizens?

Obi 

I’ve seen most of the Japanese enterprises are very open to working with US projects. They’ve seen in terms of Technology-wise, US market is going way ahead than Japanese enterprises. Yeah. When I brought Quantstamp, a lot of Japanese especially like tech enterprises were very interested to meet us. I think that’s the attitude. I think it’s similar to a traditional startup what we’re seeing right now. So yeah, a lot of Japanese enterprises are looking into existing examples, existing projects in the Western world and trying to learn from them.  

Joyce Yang

Got you. And are the regulators also you know equally open to having these conversations with projects who are perhaps looking to for example get listed on the exchanges there? From my understanding is that you need to be given a license to operate as an exchange if you’re a foreign exchange and you also have to have the local regulators approve the coin specifically to be listed.

Obi 

Even like the regulators are very interested in Blockchain as a new technology; that is new innovative field. They said like when we did the Ethereum meetup with Foundation, Vitalik and then Aya Miyaguchi, the executive director of the Ethereum foundation. They went around to meet some ministers in Japan. So they had a meeting with the Ministry of Foreign Affairs and several other government officials.

Of course, they’ve been like being very careful, especially exchange side because there needs to be some consumer protection here, but I think they’ve been very open to talk with or study more about the tech side of Blockchain. 

Joyce Yang

Yeah, that’s very helpful. And so for a project that perhaps wants to reach out to a Japanese community and developers there, how would you recommend them to go about it?  

Obi 

Actually happening next week, me and then Jun Hasegawa from OmiseGo, and then the team will be hosting the first Tech focused International Blockchain conference in Tokyo, which is called NodeTokyo on November 19 and 20. So there will be most of the Japanese enterprises working on Blockchain and also developers and students will be there and also like speakers like Aya Miyaguchi and then several other developers from the Ethereum Foundation and founders of the CryptoKitties, Status…  

Joyce Yang

I think I saw Kadena and… 

Obi 

Yeah, Kadena, also Quantstamp, Richard is coming, NuCypher…

Joyce Yang

We’ll be sure to list the link of the conference in our podcast for folks to listen to who are happened to drop by in Japan. 

Obi 

It’d be a nice opportunity to get into the crypto market here. And other than that, there will be a lot of dev meetup happening including the ones I’m helping in Tokyo at least like once in two weeks or something. So if you happen to come to Tokyo, just give me a tweet or let me know. I can help. 

Joyce Yang

Yeah. Definitely, I’ll have your Twitter listed below as well in our podcast descriptions. And is most of the development happening in Tokyo itself or do you see that phenomenon happening across Japan?

Obi 

Tokyo is by far the biggest market for developers and tech industries overall, but I also think that Fukuoka is the biggest city in the southern part of Japan, has a growing community of the Blockchain developers and startups as well since their local government Fukuoka is very supportive for startups especially for Blockchain. And some of the big top Japanese Blockchain developers are based there as well. I think they have a very vibrant Blockchain community there. 

Joyce Yang

So they should definitely check out there as well and I’m not sure if they have meetups there as well and do you happen to know if CryptoAge is also doing things there? 

Obi 

No. We haven’t. We’ve only done like Kyoto outside of Tokyo, but we might do future meetups in Fukuoka as well and also like I have very good friends in the center of the Blockchain community in Fukuoka, so I can connect them too.

Joyce Yang

Before you had these meetups, how did the developers get together or were they mostly just conversing online? It sounds like there’s a lot of interest from young folks. What are they interested in? And besides the meetups, how do projects reach out to them or find them?  

Obi 

I’ve seen that a lot of students are interested in Ethereum, because like most of the developers in Ethereum communities are also very young and also I think the Ethereum meetups back in March with Vitalik really helped the general adoption for Ethereum here. So I’ve seen some students doing interesting things like developing some games up on Ethereum or like some people getting really deep into research like Plasma. So I’ve actually seen some young developers started being very active on ETH research. And I’ve also seen some people looking into other protocols like NEM. Yeah of course, like bitcoin development in Japan is very active since the very beginning. So I’ve seen some very into Bitcoin too. 

Joyce Yang

You’re doing meetups for all different kinds of coins and projects? 

Obi 

 But mostly on Ethereum or Bitcoin meetup. 

Joyce Yang

So it’s educational for students and young folks to understand what’s going on with the other projects, but your focus or the general concentration and interest is around Bitcoin and Ethereum?  

Obi 

Yeah, I think so. I would say like more on Ethereum among young people. 

Joyce Yang

Yeah that’s great. And in your size of meetups, how many people are usually there? Just as a gauge of developers and developer interests locally.

Obi 

Averagely got like a hundred people for each meetup. 

Joyce Yang

That’s a lot. 

Obi 

Yeah. When we did the first meetup for CryptoKitties, we had like over 200 people joined and most of them are like real users of the CryptoKitties. Like people who have played with CryptoKitties before.  

Joyce Yang

Yes, I remember Benny mentioned from CryptoKitties that a lot of users for example if you have a developer conference in China, most of these folks actually never use CryptoKitties. But in Japan, most people have if they were to go to the Meetup. It’s a very different kind of user base and the audience. 

Obi 

Yeah, I think so too and also like held that meetup and majority of the audience were pretty young. So any more surprise.  

Joyce Yang

Yeah. Can you talk a little bit more about… I think there are huge differences between the community in Asia versus Japan versus Korea at a high level. Can you talk about a little bit of what you’re seeing there? Because I think you are seeing a lot of what’s going on in Japan, but you also have seen what other Asian countries are doing. It sounds like Japan is gravitating towards more developer sentiment but I’m not sure if that’s the case on an overall basis or is that just a pocket of people. Are people primarily still trying to hold bitcoin, Ethereum, as stored value and waiting for the next technology breakthrough there, what is the sentiment overall?  

Obi 

Yeah sure. Well, I haven’t been in Korea for like a few years although I’m going there in person at the end of this month, but as far as I… I’ve heard about people from Korea or people who have visited Korea, that they have a very big retail investor market. I think it’s because there are a lot of exchanges in Korea and a lot of tokens listed on the platform.

So I think new tokens or smaller tokens, Korea has a lot more people first investing it or holding it. Whereas in Japan, most of the exchanges do not list many tokens. I think around 15 to 20 at maximum. So I think that’s the difference. And I think that community here started being very strong, compared to other Asian market and also a lot of tech enterprises in this space too.  

Joyce Yang

On a practical level for someone who wants to hire developers in Japan, I’m curious. Would you be able to talk about how you go about hiring these developers? Is It through hackathons? Is it through job postings locally and headhunters that a project could use find these individuals?  

Obi 

I don’t have so many examples because I don’t… I just know a few US project who actually hired some Japanese people like Quantstamp but I think from those samples, I think the effective way is getting into the community like me rather than just using headhunter or like posting on a portal. Like for Quantstamp found one developer from the meetup that I organized when the team came to Japan and also they found the other country monitor through that conference happening in Tokyo. So I think organizing hackathon or meetups can be a good way, if you have someone from your team who can communicate in Japanese, actually Twitter is a very good way to hire people in Japan, as most of the developers are very active on Twitter and you can see what they’re thinking, what’s their interest to their tweet. 

Joyce Yang

Got you, and mostly in English? 

Obi 

They mostly tweet in Japanese.  

Joyce Yang

Okay, got you. Thankfully there is Twitter translate and we could generally understand each other from despite not knowing Japanese or more of such.

Obi 

Twitter is actually one of the biggest social network in Japan.  

Joyce Yang

 Oh got you. That’s great. And just last question which is what are the general salary expectations for individuals who are working on Blockchain in Japan?  

Obi 

Not quite sure. Well, I believe that would be much cheaper than… I mean I think the general salary for developers here is much cheaper than the US…

Joyce Yang

So in the US… 

Obi 

…here in San Francisco. I mean the hiring cost here in Japan is like I would say 40% or 50% cheaper or it could be more. 

Joyce Yang

That’s pretty significant. Okay, that’s interesting. 

Obi 

But I guess still in Japan I mean here in Japan, developers that are very into Blockchain generally cost higher than normal developers. 

Joyce Yang

They’re harder to hire? 

Obi 

Harder to hire and also more expensive.  

Joyce Yang

Is there anything else I haven’t asked that you think is really interesting to bring up? How do you gouge the strength of the developers in Tokyo versus the other countries? Is it by the amount of research and patterns of the release? Do you have any stats?

I’m curious about that because I think it’s something that most people probably don’t know. I think there are a lot of people and interested developers in China and they know solidity, but I’m not sure how strong they are frankly. I know that they’re cheaper to hire for example. 

Obi 

Yeah, I think its just that… In Japan, I’ve seen more developers activities going on. So there are several meetups or community just only for developers and also just recently, there was an Ethereum developer conference which is not… I mean just recently… just last weekend Ethereum developer community happened here. So which just happened very very organically,  so that’s the dev conference organized by individual developers. Not like a company organized Conference or projects. 

Joyce Yang

 Oh I see.

 

Obi 

That kind of activities I find very unique and interesting in Japan. 

 

Joyce Yang

Yeah, that’s very unique as well I think because we haven’t seen that many projects coming out of Japan. Do you think that might change down the road? 

 

Obi 

I think it also depends on the regulatory environment. So I think one of the reasons why there haven’t been many projects coming out from Japan is that there’s been only the legal framework for exchange companies here. So it’s been very difficult for projects or tech startup to make something out of cryptocurrencies or Blockchain. But that’s something the regulator is working on to create the new framework for startups. So yeah, that could be changed. 

 

Joyce Yang

I see. So the enterprises have gotten an approval to release Blockchain projects or tokens for example; LINE has their own token.

Obi 

For now, only the companies which has got crypto trading license can do business dealing with cryptocurrencies. 

Joyce Yang

Yes, that makes sense and… 

Obi 

That’s something very difficult to get for now. 

Joyce Yang

So if I want to start an exchange or anyone local in Japan wants to start a new exchange, it’s not very easy to open a new one?  

Obi 

It’s very difficult. 

Joyce Yang

I see. Coinbase has been trying to get a license for some time. 

Obi 

Right. They partner with one of the biggest traditional company Mitsubishi. I think they’re still working on their exchange.  

Joyce Yang

So it sounds like the government and the regulators are quite cautious about opening up new exchanges and they have seen the market going through the volatility that it has and is in a kind of wait-and-see mode because I think it’s interesting since Japan has had a long history with cryptocurrency relatively than other Asian countries. They have seen a lot and have experienced through a lot versus in Korea, I think they are actually just also opening again to allow ICOS. Thailand’s allowing ICOS and has a new portal for it. So every country is in a different stage of what they’re experiencing with cryptocurrency and at this point, Japan sounds like folks who are looking to build and get more involved in the existing projects. 

Obi 

Yeah. I think so. It is a very unique environment because Japan was the first country in the world which legalized cryptocurrencies and then a lot of exchange company putting an advertisement on the street or on the TV commercials. Most of the people here know about Bitcoin and there could be other cryptocurrencies. And you can still see Bitcoin ads by an exchange company on a major street in Tokyo.

Joyce Yang

Yeah, and most people I assume are holding their Bitcoin and not very speculative with the cryptocurrency that they have. Yeah, that’s really interesting that’s why I think it’s so much worth it to talk to individuals like you and other folks from different Asian countries because every demographic is so different versus the US which is so large in landmass and it’s basically regulated by one or two entities that you know essentially dictate what’s going to happen to the cryptocurrencies there versus you have the same have the size of landmass in Asia but it’s so many different kinds of things are happening which is very exciting. I guess my last question for you is what do you think is going to happen in the next 2-3 years in Japan in the sense of cryptocurrency adoption in terms of development there and the regulators. I’m really curious to hear about your thoughts there. 

Obi 

Yeah sure. I think the difference between the US market and Japanese market is that currently, US market has a lot of developers in this space, but I think the general adoption notion for crypto is low. But in Japan, I think there’s a lot of retail investors and Enterprises. Not only tech companies, but also traditional companies working on this space, but still like way less developers.

So I think in the next few years, I expect or I wish to see more startup projects coming out from Japan from this like a growing developer community. And also, this general adoption for crypto especially for bitcoins is very high here. There’s like more development started to happen around Bitcoin. Japan could be one of the first countries that have the real implication of crypto into the society. Before like the hacks of exchanges happen, like over 260,000 merchants have made bitcoin payments here. So that could be another potential and I wish more and more international projects coming in this market and sharing the knowledge especially on the development side want to make more collaboration between the world and Japan. 

Joyce Yang

And do you think that the Central Bank of Japan would allow Bitcoin to be used as widely as the Japanese Yen? 

Obi 

Well, I hope. 

Joyce Yang

No, the reason I asked…  

Obi 

They have already legalized Bitcoin as a method of payment. 

Joyce Yang

Yeah right. Because it sounds like in Japan, you have the openness to various types of payments has been existing for a long time. So there’s no fear, for example, like in China where there are capital outflow and flight and which may bring financial instability to the country. There’s no such fear. So that’s why I asked. It sounds like the attitude has been very open and it will continue to be that way. 

Obi 

I think it also depends on how much they see the innovative potential in this market. So I think that’s the reason why it’s also important to grow the healthy developer system in Japan for those government regulators to understand the market quickly. Because if they only see this market as just a speculative trading market, the things might be different. 

Joyce Yang

Yeah that makes sense and the regulators sound like very supportive of the technology. 

Obi 

 Yeah, that’s right.  

Joyce Yang

Thanks so much Obi. To learn more about the topics discussed today, check out the descriptions under the podcast episode. Also be sure to follow us on Twitter at [Globalcoinrsrch]. New episodes come out once every two weeks, so if you haven’t already done so, rate, review and subscribe on Apple Podcasts. If you liked this episode, share with your friends on Facebook Twitter or LinkedIn. 

Thanks for listening.

 

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