On August 19, 2018, Oki Matsumoto, chief executive of Monex group of Japan, voiced his opinion on cryptocurrencies being the future for the finance industry.
Matsumoto’s Is a Visionary With a Futuristic Approach
Tokyo-based Monex marked its foray into the cryptocurrency industry via the acquisition of Coincheck, the exchange that was a victim of a recent hack, with the belief that companies which would have access to smart technologies would form the core of the financial industry possessing robust and secure transactional capabilities.
The online brokerage company Monex was a brainchild of Oki Matsumoto who created the company with a vision to shape the future of personal finance in Japan by providing a platform to actively invest their savings.
After riding success for 19 years with Monex, his vision has turned towards cryptocurrencies and the belief that blockchain technology could change the fortunes for Monex going forward.
In an interview in July 2018, Matsumoto said:
“We believe we can create a new type of global cyberspace-comprehensive financial service company for global retail customers.”
His vision and confidence in the future of cryptocurrency led him to acquire Coincheck against all odds, as the exchange was marred with vulnerabilities earlier this year. Despite Coincheck’s troubles reaching a staggering ¥58 billion worth of NEM ($530 million), Monex still went on to pay ¥3.6 billion ($33.5 mln) to acquire the hacked exchange.
Matsumoto said that the acquisition price was a little higher as it was not easy to recreate the user base and brand value that Coincheck had established. Coincheck and Monex coming together also allowed Monex to unleash a strategic collaboration as the partnership now forms a strong customer base of 1.7 million.
The services could interchangeably expose both platform financial products exposing young customers to traditional investment instruments while also opening cryptocurrency markets to traditional investors who have steered clear.
With Coincheck already at the helm, Matsumoto, now, foresees creating a new comprehensive financial organization that would be driven by blockchain and cryptocurrency as he is sure that digital currencies would enter the life of everyday people. According to him, it is necessary for organizations to change alongside society.
“People’s mindsets are always changing, so however we change, customers, environments, technologies and societies, they are moving as well,” he said.
Despite volatility being a concern now for cryptocurrencies to be used as a payment option, Matsumoto says “in the near future, a less volatile or nonvolatile crypto will be invented that will be more suitable for payment.”
Japanese Tax System not Suitable for Cryptocurrencies
Matsumoto feels the current tax system in Japan is a significant barrier for cryptocurrencies to grow in the country. Japan currently has seven tax brackets starting from five percent to 45 percent for citizens earning more than ¥40 million ($362,171) a year. This income is also subject to an additional residential tax of ten percent.
If an investor or trader earns ¥200,000 ($1,810) or more from cryptocurrency, his profits get accounted as miscellaneous income levying a hefty tax rate of 55 percent.
Monex has over the years changed the way people invest in Japan. Even though it has been able to convert substantial savings of the Japanese citizens to investment, Matsumoto still feels there is a lot of scope for money to flow into investment products.
The step might be considered a risky one but the way Matsumoto puts it, this all looks like a cake walk. With the vision and experience Matsumoto has towards the Japanese markets, his plan to set up a new age financial institution indeed seems promising. Now it’s all up to the regulators and policymakers to deliver a favorable environment for his vision to turn into reality.