On the 19th of August, 2018, the chief executive of Monex group of Japan, Oki Matsumoto, voiced his opinion on cryptocurrencies being the future of the finance industry. With the acquisition of Coincheck, which is the exchange that was a victim of a hack from recently, Monex, the Tokyo-based group, has marked its foray into the cryptocurrency industry, with the belief that companies that would have access to smart technologies are going to form the core of the financial industry processing robust, as well as secure transactional capabilities.
Matsumoto’s vision was to shape the future of personal finance in Japan.
Monex, which is really an online brokerage company, was a brainchild of Oki Matsumoto, who founded the company with a concept to shape the future of personal finance in Japan by presenting a platform in order to invest their savings actively.
After he was successful with Monex for 19 whole years, the vision of Oki Matsumoto turned towards cryptocurrencies and the belief that the technology of blockchain could change the fortunes for Monex going ahead.
In one interview in July this year, Matsumoto said that they believe they can create a new type of global cyberspace-comprehensive financial service company for global retail customers.
His vision, as well as his confidence in the future of cryptocurrency, has also led him to acquire Coincheck against all the odds, as the exchange has been marred with vulnerabilities earlier this year. Despite the troubles of Coincheck reaching a staggering ¥58 billion worth of NEM ($530 million), Monex still went on to pay ¥3.6 billion ($33.5 million) to acquire the hacked exchange.
Creation of a new financial organization driven by blockchain
Matsumoto also said that the acquisition price was a little higher as it was not easy to recreate the user base, as well as a brand value which Coincheck established. Joining their forces, Coincheck and Monex will also allow Monex to unleash a strategic collaboration, as the partnership will now form a strong customer base of about 1.7 million.
Also, the services could possibly expose platform financial products exposing young customers to some traditional investment instruments while also opening crypto markets to some conventional investors that have steered clear.
With Coincheck already being at the helm, Matsumoto also predicts the creation of a new comprehensive financial organization which would be driven by blockchain, as well as cryptocurrency as he believes that digital currencies are going to enter the life of everyday people. As he stated, it is necessary for organizations to change alongside society.
He said that the mindsets of people are always changing, so however they change, customers, environments, technologies, as well as societies, they are also moving.
Despite the volatility which is a concern now for cryptocurrencies to be used as a means of payment, Matsumoto said that shortly, less volatile or nonvolatile crypto is going to be invented which will be more suitable for payment.
The tax system of Japan is not suitable for cryptocurrencies
Matsumoto also said that he feels that the current tax system of Japan is an essential barrier for cryptocurrencies to grow in the country. Currently, Japan has seven tax brackets which start from 5% to 45% for citizens earning more than ¥40 million ($362,171) a year. The income is also directed to an additional residential tax of about 10%.
If an investor or a trader earns ¥200,000 ($1,810) or more from cryptocurrency, his profits will get accounted as miscellaneous income levying a hefty tax rate of 55%.
Over the last few years, Monex changed the way people invest in Japan. Although it could convert substantial savings of the Japanese citizens to investment, Matsumoto still feels that there is a lot of scope for money to flow into investment products too.
This may be considered as a risky step, but the way in which Matsumoto puts it, this all looks like a cake walk. With the vision, as well as experience Matsumoto has towards the Japanese markets, he has some plans to set up a new age financial institution which indeed seems promising. Now, it all depends on the regulators and policymakers to deliver a favorable environment for his vision to become a reality.