CVA Podcast: Makoto Takemiya, Soramitsu

Transcript

[Music] hello hello this is your host trash ahmed ready to kick off another bite size episode of the crypto valley association podcast a special thank you goes out to script for supporting us now let's discover together the growing trends of this fast-moving space and try to shed some light on the mysteries it contains today we are joined by makoto takimiya ceo of suramitsu a global technology company delivering blockchain-based solutions for enterprises universities and governments so let's dive straight into the hidden world of technology development makoto great to have you here how are you doing i'm doing good it's great to be here

awesome well let's dive straight in then uh shall we maybe you can share with us your first blockchain related experience oh that was quite a while ago so i first got into blockchain in 2013 in january it says on mount cox in uh when i lived in japan and uh did some trading i even wrote a bot uh that traded bitcoin but it actually wasn't it wasn't very successful and i lost a lot of money and then of course cox kind of got into trouble too that was a weird experience but but it it taught me taught me a lot uh about you know self-custody of assets of you know your own personal custody and being able to take responsibility and not relying on intermediaries and

sometimes it hurts but it you know that's how you learn and improve so from that experience i worked on other blockchain systems i contributed to some open source project projects and uh then in 2016 i was able to create my company sour mitsu so uh that was we wanted to focus on using blockchain for enterprise solutions so actually being able to build you know different platforms and apps that enterprises can use that would increase efficiency because yeah there's a lot of inefficiency and payments and identity management and tracking different things and we really wanted to make all this simple and kind of unified together part of it's because i also

in 2000 in the early 2000s when i lived in the us i worked in a company building logistics software um using ai and yeah it was really interesting how just a small like one percent or two percent increase can actually save quite a lot of money and produce things like fuel usage and things like that so that kind of optimization uh just uh got really into it was really interesting to me so optimizing things like payments and digital asset management and you know access to capital these are some of my personal passions awesome well you have successes in the small details right so it's great great to hear and maybe you can tell us a little bit more about uh suramitsu and and how things have been

going on that front so sore mitsu uh is a i'd like to describe it as a boutique uh blockchain fintech company and uh so we're we're still pretty small we're still under 100 people but we're getting closer um into that we're international group now based in switzerland so that's uh that's why we're talking today but we originally were founded in in japan as i'm also japanese national and yeah we we tried to build the full stack of applications so what i mean is we built uh the core blockchain platform that we use and then we also build apps on top of it so we were a contributor to hyperledger project of a blockchain platform called hyperledgery roha

which is open source platform and we still contribute very heavily to it and we use either han in many of our apps not you know in all the apps we use the right tool for the right job but for many things that we do like uh like digital payment systems we use hyperlinks your hot for this and it allows us to really fine tune the user experience and be able to to build in safe cards so for example if somebody loses their device you know they don't lose all their digital assets and things like that so i'm kind of like a control i'm very controlling i think in in that i try to have full control over the full stack rather than having to rely on

other people's um design decisions which maybe is a bit unusual for some of the companies in this space but i think it does some advantage yeah i i understand needing to be careful after going through the the monk uh hack but maybe you can tell us a little bit more about why you decided to move from japan to switzerland what attracted you towards switzerland well switzerland does have a good startup environment especially regulatory environment for digital assets and that was the main consideration over japan though japan of course is a very nice place um i i like it as well and we still have a company there in our group but uh yeah the headquarters is now in zug and zug is nice because

there's a lot of people that understand blockchain there in the in the local government and that makes it kind of easier to talk to people and um and uh you know do new try new things so uh when we wanted to issue a digital token we decided to go to switzerland for that okay great to hear i'm guessing it wasn't uh for the better sushi they have in uh sushi great too great to hear and and so more about sir mitsu here and so how how how is it to work with both the private and the public sector on various uh blockchain projects as they operate in such different ways how do you how do you manage those operations

so sorry mitsu i think is very unique in this space in that we we do work with government agencies so we work with the central bank of cambodia and we built actually the world's first retail like blockchain based payment system that exists in the world today and that uh that launched with real money in 2019 so it's quite quite early and then officially launched this year from the roll out to the whole country so that's been a big project that we've done and maybe i can talk more about it later but we've also done quite a lot of other projects we did a lot of consulting and prototypes which i think a lot of blockchain companies do but we've also you know worked in the cryptocurrency space as well so

we worked with a web 3 foundation which is also based in switzerland and um we built the c plus version of polka dot we've also worked with uh protocol labs and building a c plus plus version of file coin and you know things like a c plus plus uh lib pdp library and uh now we're working on the soraa uh well sora's are kind of a crypto anarchic project that we contribute to and that's a kind of like a decentralized central bank and i'm happy to talk about that more but on top of the sore net we're building a dex for uh we got a grant to build a decks for a polka dot ecosystem called pokeswap and uh and then we've also been building uh a digital

currency wallet called a fearless wallet for the um kusama and polkadot ecosystem so we've done quite a lot of kind of eclectic uh things but they do share some common threads we've done a lot of work uh with payment systems and as part of the payment systems for corporations and for uh governments we we do manage digital identity well um one one project i forgot to mention that's also kind of interesting is we in japan uh we worked on building a digital payment system for university of aizu which is in fukushima prefecture it's called biaco and uh that's a it's kind of a replacement for just uh prepaid cards that students used at the cafeteria and campus store

but we just made a nice digital app that uses it and uh to make it really easy to to use uh like a payments system uh just on the university campus and so this is kind of like a fun uh project that we've done but yeah working with governments and large you know banks and institutions is uh is quite you know challenging thing and uh it takes a lot of uh work and effort but uh i would say that's also equally challenging to work with you know public cryptocurrencies but the challenges are in different ways um but both are kind of in many ways safety critical domains because if you lose you know if there's some kind of flaw in the software people can lose money and that's not you know it's a pretty serious thing and uh i would say in

many ways the open blockchain space is even stricter because uh you know if a central bank system if anything happens you know in theory there's ways that you can solve that but in a public blockchain space if there's some kind of bug in the software that's really you know unsolvable without like a hard fork like once upon a time but yeah so it's it's really yeah the dichotomy between the two worlds is very interesting and i think gives us a very unique perspective as well um it's kind of like learning a different language so people learn multiple languages have i think more of a deeper perspective on on life than if you learn just a single language

because so you you have to kind of see the world in a different way and be able to comprehend it and and it gives you a greater sense of empathy i think it's been very interesting experience i can imagine it sounds like a lot of building and a lot of very interesting projects maybe one that you mentioned right at the beginning with the national bank of cambodia i mean does that mean that the acceptance to all this new technology is growing yeah well in some ways right so cambodia is very strict about things like digital like cryptocurrencies like they don't allow cryptocurrencies in the country currently in the current regulatory regime which is one of the strictest in the world but on the other hand central bank is using blockchain in their uh payment system which is quite

quite interesting i think it shows a greater acceptance over embracing technology that is more robust and unstoppable and i think that's a very good trend to have i think this is just one of many steps that will be taken in the future so it's it's not you know in its complete form yet but in the future i think having a more open and decentralized financial system and financial markets infrastructure will uh make everything much more transparent and resilient as well so instead of like regulators getting reports and finding problems after the fact you know rules can be programmed to prevent problems from happening in the first place and i think that's

that's the trend that we're going to see really play out a lot over the next 10 years okay wow interesting so following on that we have a thought there what are your thoughts about cbdc's then i mean last season we had an interesting discussion uh with an economist discussing their growth in europe uh what's your perspective regards to cbdc's in in asia well yeah it's quite a deep topic i think so the the system we built in cambodia actually can be thought of as a cbdc system because according to the imf's definition it it matches the definition that it's a digital digitized liability of the central bank that retail consumers can use for payments so it's it's not really you know a magical thing so

depending on the design decisions that are made you can create a cbdc that either competes with commercial banks or that helps commercial banks and i think in cambodia a lot of emphasis was put on designing the parameters so that commercial banks were not disintermediated but rather they have new tools in which to serve their customers but yeah in europe there's quite a lot of debate as to you know should the central bank should someone like the ecb open up their balance sheet directly to retail customers which i i don't think will will happen but at least not for regular retail maybe in the wholesale space we'll see more and more of this um but uh like the bank of england for instance uh they

open up their balance sheet to large non-bank institutions not only banks so in the same sense i think cbtc is really going to be a continuation of the current trends rather than anything really revolutionary i do think that central banks offering digital currency apis and open banking systems will allow allow their fiat currencies to be used in a more convenient way which will be um i think very important to stopping uh you know trends such as uh dollarization or or you know proliferation of other fiat currencies from other countries or even supernatural digital currencies such as uh you know what dm is working on but uh yeah we'll

see it's very fast moving space there's a lot of uncertainties even in the world economy right now so you know yeah it's a it's a scary place and i guess that's why you released the the fearless wallet to be fearless in in the face of this maybe you can tell us a bit about that project and what makes it uh so special so fearless is a uh yeah so it's it's a wallet that originally came about because of people in the kusama ecosystem so kusama is like one of the networks in like the polka dot ecosystem you've got polka dots and you've got kusama they're separate networks and kusama is kind of like geared towards faster evolution and trying new things and experimenting and and that's really why we went with

the name fearless there's also some in inside jokes for those who were in uh the polka dot event in berlin in 2019 we we had a we made a pink t-shirts with gavin's face on it and uh like this fearless libertarian leader so that was that was just a fun thing that we we had so it's kind of like a play on that but also play on you know the fact that kusama is meant to be like a bold and brave uh new you know network that you can try new things you don't have to be afraid of breaking things and failing also in the general sense the the cryptocurrency space and self-custodial space in general i think is really you know it's it's all

about being fearless and you know being bold and taking uh responsibility over your own uh digital assets and and you know that that can actually make the world a better place because it decentralizes a lot of the control and it can lead to better more socially acceptable outcomes i think in the long run yes no definitely and we've also developed a groundbreaking decentralized um economic system called uh sora i mean it's aimed at changing the way goods and services are bought are brought to market uh sorry i mean can you tell us more about this one so sora is kind of like a decentralized central bank so that sounds kind of you

know like an oxymoron but it kind of makes sense so intuitively like central bank is like you know most people think of it as like the issuer of money it's really not the the sole issue of most of the money in the economy but the common viewpoint is that central banks you know issue money and then like this money gets distributed and uh in in sora what we have is we have a decentralized way to decide the the creation distribution of new tokens so if you study you know different macroeconomic theories especially things like the disaggregated quantity theory of credit you can find that it's really the expansion and purchasing power uh that's used for production for productive activity to

create new goods and services it's this expansion of purchasing power that drives economic growth and it's you know it's been shown by the work of professor richard werner that uh it's it's both necessary and sufficient to have uh credit creation for production uh in order to have economic growth so you don't you don't have to play things like interest rates or anything like that so in the cryptocurrency space you have bitcoin and bitcoin uh it currently is inflationary it won't always be but uh every new block you know some new bitcoins are minted and these are given to to miners and um this is not creating new purchasing power for production rather it's creating it for consumption and bitcoin you know goes up in value just because because more people are coming into the ecosystem it's not because

there's new there's no productive output right there's no new goods and services being created you know with these newly minted bitcoins and uh so what we want to do in sora is to really like create a way that new capital can be created and allocated for productions so things like you know if you wanted to create uh so you're in switzerland so if you wanted especially the french part if you want to create like a new wine company and a vineyard buy some land you know plant some grapes wait a few years make some wine with beers you can have uh some new product so you've new new outputs you new outputs and if you if you mint new money to create this new output and the two you know more or less balanced then you don't have you know reduction in

purchasing power obviously in the wine example there's a large temporal lag but if you have you know a very large economy a lot of these lags will average out so in in sura we want to make it so that so we tried a couple of iterations of the projects so we want to originally we just had unbalanced ability to create tokens but this was kind of it's kind of hard to to rationalize that you know because the amount of token creation is kind of hard to analytically come to so instead we are using a token bonding curve where it's a market driven activity so if people if there's high demand for the token more tokens get minted and if there's low demand then then actually tokens get taken out of circulation or

demented and then a portion of the minted amount goes to into like basically a fund and then this fund can give capital to producers then producers should sell their goods and services in exchange for the the currency xor in order to balance out the creation of the new newly created goods right so for the new great money so the goods and the money should should balance out over time okay understood yeah and and uh so that's so generally if producers are efficient you know they can actually produce way more output than the input as far as monetary base is concerned so that's kind of what we're doing we are working on the token bonding curve implementation now that's going to be the soar v2 network

and that's going to be using a paired substrate blockchain check and that would be we want to get a pair chain for kusama and polka dots that'll be in the polka dot ecosystem so we're actually looking at launching this in q1 next year so okay it's getting pretty close we've been working on this uh for quite a while since uh march so it's been takes a long time to build high quality software actually especially in the uh in this kind of safety critical um you know financial space yeah you said well make sure for the audience to keep their eyes out for that and uh yeah i mean i love very used example of the vineyard for wine for the swiss french um i think it depicts us quite uh quite well and so we spoke about many

many different projects that you're working with helping develop and build what's your what's your your vision for the future of this whole industry uh it's a good question so my you know there's many paths there's many risks but my i wouldn't say my vision but my hope is that this technology can be used to really empower mankind and uh you know give give producers who need capital the capital that they need to go and create new things because this is what pushes humanity forward and i think that you know it's a big universe uh and i think we need to expand more into it you know beyond this this tiny ball though it's very nice place yeah i think that it's really important to um you know to really

push things forward as fast as they can go because uh you know there are lots of risks and a lot of people especially as we saw this year a lot of people are still i think overly enslaved uh by by you know whatever political system that they're in in japan you know we're really lucky that the government's not really overbearing and people don't push uh you know they don't force people to do weird things without any anything that's uh behind it so but in in europe the trends are a bit concerning i would say interesting well yeah definitely if we can reach out and get past our stratosphere land on the moon it'd be a great i think for for many uh within the community so thank you so much for

that insightful futuristic uh vision speech there maybe before we close up today do you have any final words you'd like to share with our audience yeah so like everything we do is really open source like all the the key products and and technologies so people who are you know good at programming we really encourage people to come and you know build on what we're doing soar network uh is going to you know allow people to write smart contracts and create their own apps on top of it so if you're interested in the sorry ecosystem you know you can come and build your own like decentralized apps or any any kind of app like there's there's lots of potential there um like basically everything still has to be built right now we are building a dex called a

pokeswap with uh we got a web 3 grant for that so yeah people who are you know interested you know can check out x check out our website stormitsu.co.jp or sword.org which is our the website for the open source sword project so yeah please contribute you know let's create a better world together awesome thank you so much still lots to build but uh very hopeful yeah that it will be done so if you enjoyed this conversation feel free to check out more on our website cryptovalley.swiss where we host plenty of events educational content and even provide information on how you can join our growing community so thanks again makoto for joining us yeah thanks for having me awesome so

stay tuned stay safe and until next time from the crypto valley in switzerland bye [Music]