Japanese Legacy Enterprises and Blockchain Adoption

Transcript

[Music] Fore! [Music] Foreign! Foreign! Next, we'll move on to the panel discussion. The panelists are

Mr. Koichiro Shimoyama, Mr. Tomas Tanchek, Mr. Taiki Narita and Mr. Ash Morin. The moderator is Mr. Humihiro Arisawa. The theme of the discussion is blockchain adoption in Japan's legacy companies. >> So um nice to meet you again. This is Fumi from Xing and uh this time so I will be the moderator of this one. So this topic is very interesting. So this one is like a Japanese legacy

enterprise. How to integrate Japanese legacy enterprise into the blockchain especially is Italian foundation. So there are a lot of two uh members from Isaam foundation and two members from Japanese corporation. So this was very interesting. So if possible could you introduce yourself there please? Hi, good afternoon all. My name is Kur Shimuyama. I'm working for a NT digital which is a subsidiary of a entity Takama which is a actually a Japanese a largest telecom carrier and uh I' I've been working for the company for about two

and a half years as a uh uh pro uh product designer and also the risk management for the firm and I'm really uh excited to be here and thank you for joining us. >> Thank you. And uh Mr. Thomas, please. >> Uh hi everyone. That's um my name is Thomas Stanto. I'm a co-executive director at Ethereum Foundation. Um so my story in blockchain started in 2017. I I bootstrapped Ethereum infrastructure company called Nethermind.

And uh before that I was in traditional finance institutions. So I was working at City Bank and then at a hedge fund called Rockus Capital U mostly as an engineer and then nowadays uh I obviously set the work on the execution of strategy and operations at the Ethereum Foundation. I'm I'm a nomad for the I've been a nomad for the last four years which means that I I visit Asian countries quite a lot and I I also witness generally the markets development uh around the globe and that's it'll be great to talk about particularly Japanese market today.

>> Thank you. Thank you. Thank you please. >> Thank you for having me. Uh I'm Tiki Blockchain leader of Sumitomo Corporation. Uh, Summit Corporation is a global trading and business investment company with 127 offices in 63 countries and we have diversified businesses like uh real estate media uh retail like supermarket and drug chains and also renewable energy like uh solar power plant and wind power plant and so on and so forth and now we are stepping into uh crypto and blockchain space. Uh I'm really looking forward to discuss about it with wonderful panelists.

>> Thanks. >> And uh lastly, Ash. >> Hey, uh nice to meet everyone. Ash Morgan here. Um similar story to Tamar. Co-founded and bootstrapped an Ethereum infrastructure business called Pier 2 in 2017. Um and then went on to grow that um with my co-founder. Um and uh similar to Tamar again been a nomad for the last couple of years traveling around trying to spread the good word of Ethereum. Um and then uh joined um the enterprise team here at the Ethereum Foundation uh about 3 months ago to focus on and lead the stable coin and real world asset adoption. Um my big perspective I

suppose and interest is ensuring Ethereum is adopted as financial market infrastructure globally um and it's used as a risk management tool um in every major financial institution around the world. So thank you very much for having us today. >> Okay, very appreciate. Okay, let's go to the first question. So this is very interesting question. So the first question is why the blockchain is important for enterprise and uh how important it is. Do you have any answers?

>> Yeah. >> Oh cash please. >> I think um the future's going to be an interesting place with you know the AI revolution. Um it's going to we're going to need infrastructure that is secure to to do all future transactions and I don't think anyone globally is pitching a different solution to the way in which you know the future of transactions will be done. Um we're probably not there yet today but um within the next five years this infrastructure will be um very dominant across the world. um you know ensuring security um a neutral platform for every entity to be able to

participate in a global financial system right down to the everyday individual in remote um countries that you know they've come online with the internet in the last 10 years and now get access to hopefully the global financial system. It's a democratizing force. Um and I think you know with that in mind uh this is going to come from both you know innovators, startup founders and then it's going to come from financial institutions. I think a lot are seeing today um the evolution and understanding just how important this technology is and seeing it for the properties that it has um you know to enable um all future

transactions. There today are so many payment processing networks. Um there are, you know, so many different protocols, so much infrastructure that is owned um and run by proprietary, you know, corporations um that can turn off um access overnight. And I think ultimately countries um businesses um you know governments regulators want to see a system that is a bit more immutable um than what currently exists. So that's in my opinion why I think um institutions are going to be interested Japanese institutions. So yeah >> that's uh very interesting. So I have

one question. You are saying that uh different solution you know from the traditional finance. What is especially different solution? What is the different between traditional and the blockchain solutions? >> I think ultimately there are so many barriers to entry to access the financial world today. >> Interesting. this infrastructure is proprietary and you know you need such significant compliant and compliance and you know licensing fees on a yearly basis as an entity. So it ultimately prices a lot of people out and smaller startups out of becoming payment service providers becoming small banks. You

know, ultimately we'd love to see many new investment banks be able to address niche areas and specialize in new forms of um financing of all new sectors. And today it makes it very hard to do so. But in an open transparent system such as you know Ethereum regulators are understanding that it's far more you know it's a you're able to enforce the law a lot um better on these systems as well which means that you know you're able to lower the barrier um to access this stuff and to become to become one of these entities I suppose >> that's a huge potential. Thank you.

Thank you. Okay. >> So, yeah. So, uh we see blockchain technology is uh disruptive disruptive innovation causing paradigm shift to our society and our businesses. So, we think we have to adapt to this new wave for building uh sustainable real world use cases. So for example um Sumtomo Corporation as I mentioned before we have diversified businesses but we are originally from uh import and export business.

>> So buying goods uh from Japanese manufacturer and uh export to overseas and vice versa >> and uh in this trading business sometimes we provide a supply chain finance. So that means uh pay uh pay paying to supplier before receiving payment from buyer. >> So in in this kind of trading supply chain finance business thinking about blockchain >> uh that kind of business can be replaced by uh programmable uh smart contract and stable coin payment.

>> So I strongly believe we have to adapt to that kind of new web. >> Wow that's uh very interesting. You you can use for the stable coin for the trading right. So do you see the big potential for JPYC or you are trying to issue your own token? >> So to to be completely honest we we are thinking about to use stable coins. It's undisclosed information. Yeah. But probably we have not issue stable coin but >> yes >> we are still discussing but it's very difficult to kind of profitable for that kind of businesses. So at this moment uh yeah we are we are just thinking about

>> so that means you are planning to use JPIC what USDC or USDT or public China that's nice okay thank you Thomas >> thank you um so when I think about maybe the last few years of adoption of blockchain by institutions very often institutions were going towards blockchain because they were planning to save costs on um on the reconciliation processes on tracking the where where the funds are trading activity. Uh for example, the treasury management in many of the financial institutions uh is a big headache nowadays when you have to reconcile solutions between uh between

the fans and prime brokers between the banks themselves when they uh when they try the back office systems. This is uh very high level of cost of processing. you know many of the transactions also in the world they have this plus three days processing on one side yes we know that this is for potential profit from the money deposited at the institutions but actually very often this is because of those back office processes being so so inefficient so expensive and and you have to triple check things and many many mistakes are happening uh in in the settlements between the large institutions and then when you when you have it in the crossber payments the complexity is even higher because you you go with the international

regulation, sanction systems, verification of payments, uh conversion in the uh FX markets, the FX not all the markets also operate on the weekends or outside of business hours and then the business hours in different countries differ. And then suddenly you have the blockchain in uh the private blockchains can help definitely to decrease the costs internally for the organizations a group of organizations and very often of by itself maybe the technology is not cheaper than than if you had an excellent system built inhouse for processing everything like this uh a glorified like centralized database but many institutions would have to build

the all the processes standards uh on how to build the systems of record, systems that track transactions with blockchain very often this comes as a set of standards. So blockchain for institutions very often is exactly this like a set of internationally agreed standards of how to track the payments, how to record the payments in an immutable way and this is what regulators are asking for. This is compliance systems what are asking for. Uh this is what the accounting auditors are asking for. Give us immutable records. give us the information about all the all the cash flows within the organization and um I think that so far the biggest challenge is around access control the privacy of some accounts uh if you store them on the transparent

blockchain. So, so this is decrease massive decrease of costs uh the easy access to to global standardization processes, settlements between the organizations uh and much cheaper international transfers and faster settlements internationally. Uh many other aspect like so maybe also the aspect of control over if we're talking here about institutions issuing their own stable coins. uh this is great ability to control the payment systems and and building the ecosystems with customers uh with payment providers with uh and going directly to retail users combining that with the processes of KYC of loyalty and so on. So many institutions

just find a lot of opportunities in combining uh marketing payment settlement solutions here. >> Well that's interesting. So you were saying that the most important thing is crossborder payment is very good right how about like uh investment like a meta planet or strategy what do you think about this one >> I think the investment strategy is it's coming with the new opportunities right so digital assets as a new asset class creates new opportunities and it creates a lot of interest and people see how they can have exposure to the new technology and the transformational technology technology. So it it is in a way on the side. So some institutions

will try to uh to issue assets that represent the transformation. Some other issue assets that use the technology but not really represents that technology progress itself. Right? So if we tokenize uh if you tokenize securities of the already listed companies that they don't necessarily represent participation in the growth of the technology itself but uh the the maybe digital assets treasuries more often uh somehow represent participation and uh store of value within specific specific digital assets native assets. That's very interesting like the tokenized asset is the future or big potential right that's >> definitely

>> okay thank you >> yeah uh firstly I think I should touch on the reason why entity decided to establish entity digital which is a uh company to dedicating to develop a web3 type of services relating services and infrastructures and that is because the entities telecom carriers and telecom carrier is supporting a internet layer zero or layer basement I mean so to speak and uh uh uh I mean the if the web 3 can create a new uh use cases or new you know opportunities to uh uh encourage

everyone to use internet in more more in a different meaning is a it ultimately bene benefit to uh entity as a carrier. So that's because we have stepped into this space. But uh after uh experiencing in uh many you know attempts or projects uh relating to the blockchains uh firstly uh we have uh getting more uh confidence that blockchain can make a lot of things and um that is particularly uh evident that when we decided to use a USDC uh stable coin as a uh sort of uh settlement tools for our own business.

Uh that creates a lots of lots of you know uh uh efficiency in treasury management and after as a result of the Japanese government's decision to uh make it whitelisted in Japan's crypto exchange to be tradable assets in Japan. USDC is now tradeable in Japan and after after that we can uh I mean easily convert it into Japanese and fiat currencies instantly which creates us a uh which which which makes us uh uh to uh complete the whole payment rail across the globe to make every you know business uh settlements in a smooth way.

So we we experience it. It's really beneficial and uh mean it's a proven history. I mean it it it means a lot to us. Uh so that's uh I mean uh I mean to me I sense that we have crossed a sort of a a revol. We we cannot return to the uh back to the uh before you know stable coins world uh to make everything in a uh uh uh smooth way and that can be a uh applicable to everyone in in the world.

I mean particularly in the Japanese uh uh industries I mean enterprises because they you know like corporation they have a tons of a crossber payments and also the Toyota Sony and everyone has a it's their own uh crossover payments which is now relying on banking conventional banking rail uh which I mean like everyone says say it's it's a costly and time consuming space processes so yeah once we experience the stable coins efficiencies you know we cannot return back I mean go back to the past legacy platform >> that's what I'm sensing >> very interesting why not JPYC >> well JPYC yeah JPYC I mean it can be but

you know the uh US US governments probably it's the strong motivation is to make a USDC as a kind of base currencies in a digital world trans digital world businesses is as a whole and uh JPYC can can be >> but I mean that is a that that I mean the introduction of the stable coin may introduce a second effect >> to second wave >> to uh uh to to introduce a new type of businesses or new you know sort of a services in the world which probably uh starts from uh finance areas I guess.

>> Yeah. Like you know bypassing a credit card I mean uh you know uh uh visa master you know American Express those those guys bypassing those those guys can be possible by employing the stable coin as a as a settlement uh tools. So that can happen in Japan after the introduction or adoption of the GPYC. So >> I guess >> so from NT's perspective so what's kind of settlement you are using by stable coin like a payment for the cell phone or no no well that can be possible but at this moment you know that is a only

limited to our own I mean ask means entity digital it it's for entity digital's own purposes >> so in other words we have a uh strong uh relationship with a uh crypto foundation out of Japan or maybe from time to time we I mean in for for instance in the last WebEx in 2025 in Tokyo >> uh we have a organized sort of a uh small small uh uh meetings >> uh inviting uh our clients to uh set up a sort of a meet up with a uh newly emerging protocols

>> and uh to have them on board >> we accept some sort of a participation fee in the form of USDC >> from everywhere in the world in very instantly we just provide them a wallet and give us a 3 bucks 3 grand USDC that can be done in three days >> interesting thank you okay so we discussing about positive side of blockchain into the corporations but uh what is the challenge is to use blockchain into the I mean enterprise or corporations what is the most difficult things what do you think okay

>> so yes uh there are still several challenges uh especially in legation in Japan currently. So uh as I said uh we are now planning to use uh several coin for cross limitance. >> Yes. >> But uh in current regation uh there is a uh volume limit 1 million yen per transaction. >> Yeah. >> So that that is too small for for enterprise to use stable coins limitance. So yeah uh I I hope uh that kind of uh allegation limit will be modified in coming years >> and also I think uh there is some kind of business related technical challenge as well. So uh so blockchain itself uh the sorry the

performance of blockchain itself has grown dramatically last five years >> but I think there are still some kind of technical challenge >> at the offchain part and also bleaching between onchain and offchain. >> So for example same example in uh cross border money limitance using stable coin. So onchain part is amazing. So the uh time and time is almost instant and uh the cost is almost zero. >> That is amazing. But thinking about enterprise use case, we have to uh change from fiat to stable coin and also change to fiat as well. So thinking about this onchain offchain part there

is a agent like cryptocurrency uh exchange >> they will take some uh margin of course and also there is a kind of service limit under its service uh service policy as well and further um uh thinking about last one mile uh transfer that means uh from the cryptocurrency uh exchange to our bank account >> there is uh that that money transfer is based on the traditional uh traditional financial system like bank bank transfer that that means another additional cost and also time. So that kind of offchain part and bridging onchain offchain part

is also kind of challenge still days. >> Yeah, this is kind of difficult to withdraw right kind of uh that's very interesting like uh one is liquidity issues take some one question about this one. So um offchain means um I mean cryptocurrency was stable coin to fiat currency this is you are saying >> yes >> uh that's a challenge >> yeah actually our company is same things have issues like we get the USDT and uh USDC and change it to the bitcoin and change it to the Japanese or something like that right that's a big issues

>> it takes co some time Yeah, the time. Thank you. Okay, Ash. >> Thanks, Taki. Um I think following on from Koicho Chiro's um point about the US dollar being used for settlement it's and after speaking speaking with plenty of bankers in the last period it's evident that their position is that um a lot of um you know foreign currencies are going to die you know 20 to 40 will die out which I think is a bit of a concern um with respect to uh the sovereignty of all of these countries and I think this is actually a

major problem for all of the financial institutions that exist in each of these countries. they're licensed and regulated in this environment and those commercial banks for instance have you know the the first um touch point with newly issued um currency from the central banks and if we're to move to a US dollar um hedgeimony with respect to to settlements crossber settlements then they they very much are being displaced um in that process and with that relationship they have with all the central banks um sovereignty each country. So I think like that that if we frame it at the top level that that is definitely why we haven't seen you know

um major adoption at the banking level. Um now you know going a little deeper there to to your point um Turkey is is um the problem getting you know uh this stable coin offchain. It's a major opportunity but also a major problem because if you think about where that um stable coin has come from like my position is that it should be digital cash but if you think about where it's come from the proof of funds these entities that are offramping that um stable coin they have so much scrutiny on them to ensure that that you know stable coin is is not something that's just come straight from you know a black market illegal operator. So that that's

why there's so much concern there. But then there is so much opportunity and it will be a huge forex market going from stable coins um into fiat. So the banks are all very interested to participate in this market. There's just you know um still layers to to work out in terms of that regulatory piece as to to how it will be monitored. those last few hops of the transaction, the proof of funds, where where those funds are coming from, I think is is ultimately a massive problem to solve when it comes to crossber payments etc. in this open world of of um permissionless blockchains. If in the case of you know stripe tempo every transaction

ultimately um within that environment will to some degree be KYC as they will have a very clear inpoint and outpoint and they will be able to attest to regulators that but in the permissionless sense there's going to need to be more sophisticated infrastructure built at the banking layer to um to monitor manage that piece. Um and I think ultimately from our perspective, the enterprise team, we're around the world speaking on the ground and um online talking to these institutions and we're trying to empower them to to um push towards and understand stable coins at this level, speak with the regulators and empower their local economies to to really

interact like that is important. you know, Japan should um be looking, you know, to issue um you know, uh tokenized deposits. They should be looking to issue, you know, the JPYC and you know, so corporate um you know, JPY, but then also the central bank I think obviously has a major position here as well. So from my position like wrapping this up, it it needs to come you know from within each of these countries um you know to ensure they don't ultimately lose their sovereignty within the global financial system.

>> That's interesting. So you're talking about talk to regulator or government. This is very important, right? >> Yeah, I think they you know um Singapore is really interesting here. um uh MAS they're they're really focused on interacting with um the financial institutions and there's push you know from multiple different um blockchains to be involved in the conversations there and I think that's a really important piece um the banks shouldn't you know the regulators shouldn't create an environment of fear I suppose the banks should feel comfortable to speak about all the problems the blockchain foundations and blockchain representatives should feel comfortable

um you know and ensuring that they don't feel like they're going to be pursued for any of the statements that they make um to a regulator on these topics. And if we can create those types of environments globally which a lot of regulators are pushing for um we'll see major um wins with respect to this um infrastructure being adopted. I believe >> that's interesting. So like I said before I am the chairman of the blockchain association. So I talked to SFA in Japan that they really want to talk to like your side like is our BNB chain. Maybe I can introduce to them.

>> Yeah. That's great. That's interesting. >> Yeah, I think the you know the approach is definitely moving forward um in conversation. That's a big part of what we're trying to do is just converse with everyone. >> Thank you. Okay. So Thomas what is a challenge? Yes >> maybe I think that uh my view is similar what Taiisan mentioned here that uh the the lack of infrastructure that's already implemented for many of the traditional companies make this transition process very uh very expensive and difficult. So there is lots lack of expertise like of uh supporting infrastructure companies um available globally or here in Japan you

know uh many of the institutions that want to start integrating blockchains but still lack the expertise or partners to build it. Now it doesn't mean that the blockchain itself is a technology is difficult to adopt or or it's expensive. It's just the transition process and how many of the existing solutions you have to integrate with blockchain that is particularly cumbersome but they the moment when you when you transfer more and more businesses to stable coins payments to blockchain payments then the intercomp settlements payment systems all of this becomes much more simpler.

So the the compliance models, the payment systems, the timing, the cost of all of this. Uh so as we mentioned here, if you if you build solutions in the Ethereum L2s nowadays, then you have like a fraction of a second transfers and like some sometimes it might be 1,000th of a uh of a dollar as a as a payment uh cost for a single transaction or even much less. Uh so so all of this is very cheap and available and scaling and and will be capable of scale further and uh and accommodate for all the payments between the companies including the retail payments uh especially as the technologies around ZK are progressing as well. So, so we see as it's not like

we're plateauing it and we see further scaling that is exponential and uh and the promise is huge but they it's just that transition moment of like from fiat to stable coins. So, so we need to have the very established relationships between the organizations and custodians between organizations and the banks that can hold deposits both in the stable coins and uh and uh traditional fiat currencies. and where you start treating those deposits equivalent on the on the risk side and operational cost side. And maybe talking more about the risk obviously still organizations will be afraid of the blockchain immutable na

nature because if you have the traditional payment trails that have those delays of one or three days of settlements uh this is very often also allowing for the reversals for for the additional verification and making sure that the money doesn't move too fast uh and and this is a bit of risk perceived risk I I feel the technology comes together here that you have on one side blockchain and moves money very fast but also with additional AI enhanced uh oversight and the compliance KYC measures you can track money very fast and you can react to those events uh very fast because you can do all of that edge case detection in a much more efficient way. uh also on top of

blockchains on top of this neutral payment layer of Ethereum you can also build arbitrary logic that uh really safeguards and introduce artificial delays for checks. So so it's all possible it's just not there yet and it's it's a matter of gradual adoption among all the institutions that they can take advantage of of the technology. >> Yeah. Interesting. So that big point is same like from blockchain to the fiat currency right? >> Yes. Yes. So one question do I need fiat currency?

>> Um so you know in a way stable coins are representing fiat currency in a digital form and the minting of stable coin uh is is related to deposits of the fiat currency. So fiat currencies still will remain an aspect of monetary policy of each country and ability to to manage within the country trade and also like the international settlements to some extent. So um I I think that generally those all the fiat currencies remain or continue competing with each other depending on the local economy strength.

uh so maybe there'll be some temporary shift when you see oh USDC and the stable coins activity uh it will create some temporary dominance of the stable coin here but you had this already in the past like the dominance of particular currencies in the international trade right like so the the reserve currencies usually this is one one major reserve currency or commodity whether it's gold or US dollar or whether these are aspiring currencies whether it will be the the Chinese yian and the I don't think this will change much and then the fiat currency representation and the digital form you may have over time the direct issuance to the chain I'm not sure how how close

to that we are I think not very close yet >> uh but as you will have direct issuance of equity then over time you may have also central banks issuing directly to the uh to the permissionless systems as soon as they'll feel that there is the level of security uh of those chains of those technologies uh that doesn't doesn't allow like state actors to to let's say u steal trillions of dollars right in the because when we think about it nowadays you can block those international payments you still have the situations where maybe like billions of dollars are being defrauded uh in the traditional markets they uh they go around sanctions they they go around the

checks uh But I think in blockchains it might be sometimes much uh much harder to see how all of those components play together nowadays. Uh in the future I think it will be all sorted and then you'll have the same uh same strong oversight as nowadays in the fiat currency world. >> Nice. Thank you. Thank you. Okay. Well, in a sense, I think uh blockchain has been adopted in as an investment tool >> because we see a huge, you know, uh uh expansion of the market capital of Bitcoin and Ethereum of course. And uh if we talk about the utility side uh for I mean use case side uh how we have we

seen you know sizable I mean adapted >> uh you know uh widely accepted use cases >> yet. I mean that that's a question we should ask and the stable coin is going to be a first >> killer contents or killer product. I mean it's a it's a kind of a tokenized cache and uh it's it's a kind of a uh uh very you know uh promising uh or use case as a tokenization I mean as a whole >> and uh uh if we talk about the uh uh the pains or disturbance in adapting in in

the uh uh mass adoption I mean which which deserve the mass adoption of the blockchain. >> It the pain point has been addressed in proper properly. Those uh you know uh difficulties in setting a a wars or UIUX or scalability or things like that and so on so forth those has been addressed in in in the proper way and also addressed and uh try to be solved by the ecosystems particularly in the Ethereum space. you know everyone wants to solve the problems by introducing a account obstruction pay master you know every form of EIP is has been contributing to address

those issues >> and uh you know like I said um those uh problems has been addressed and uh now we have a very you know promising and potentially widely acceptable uh use case >> in the form of stable coin. So uh what is uh uh still missing here is a people's experience and uh that was just happened this year. So I think uh going forward I mean from now on we are now in my sense we are now in the second stage or next level on the

tokenization process and blockchain adoption >> as a whole. So yeah, that's what I'm feeling. >> How to solve I mean the how to penetrate uh stable coin to Japanese market like a UT like we can use JPYC in the 71 or something. How to do that? We we we we have a uh I mean yeah it really depends on how much uh innovative idea will come will will appear appearing will be will appear >> but uh one thing that I'm interested is in the in the case of USDC in in US yes you know people use it to

>> I mean that that is also you know already employed by PayPal >> and also the square can accept stable coins as a uh payment to payment payment tools. And uh one interesting uh reports I I I I I I read in in the paper is a one of the restaurant chain in New York only accepts a stable coin to uh have a uh lunch or lunch or lunch or dinners in in that restaurants and that is a you know the one aspect of the blockchain's uh um advantage which means

a you know uh cost efficient plus some sort of a communities building purposes. So uh you know introduction of a stable coin or the wide acceptance of the blockchain or uh you know all those thing things should have a should should should represent uh sort of a uh a unique experience to to to the users and I mean what is still missing here is a to me it's a it's an experience. H interest. Thank you. Okay.

So the next questions the Okay. Ash Thomas, do you know him? I mean the NT and Sumitomo. They are a huge company in Japan. This is a good chance to sales from ISA. So please provide sales pit to two companies from ISA foundations. What is your strength? You know, actually we had I had a massive pleasure to to meet Tisan last last year when traveling to Japan >> and I think um that gradual learning of the of the Japanese market of the companies here. It's it's most

fundamental for us be because sure you can talk about Ethereum as being this global neutral chain and having the layer 2 solutions with uh with great scaling and low cost but you start talking about it and you start selling but actually then you you understand that no no no wait first understand every single market has some specifics every single market is at different stages of of progress and we we know here come to Japan we hear about changes in taxation We see um that stable coin revolution with we see GPYC being accepted and and talking about payments.

But we see also the barriers of this 1 million yen level where many organizations say that we can experiment here but we cannot really use it in in production environments and only then you can understand what does it mean which which aspects of technologies are ready to be adopted uh which which partners would be best at this stage of development. what type of infrastructure challenges are there? Uh can we can we really expect that the same operators, same custodians in banks that that maybe now are are moving ahead in whether it's US or or in Middle East or Singapore whether the same solutions can be used in Japan. uh as I think we are very much continue to be open to to much more

learning and at the same time uh I think it's a great opportunity also for for any infrastructure operators any companies to adopt Ethereum in Japan because my feeling in Japan is that Ethereum is not as ubiquitously like understanded as uh as it is in the west like when I when I when I go to markets and uh in Europe in US and in Singapore Ethereum is definitely uh always always at the front of thinking of how to deploy uh I feel that some some other layer one chains in in Japan or Korea very often some somehow are more visible. So we've done some

somehow maybe a bad job in the past as the as the Ethereum uh coordinators ecosystem players to to show why is globally continuously chosen as the first first default choice for tokenization for uh for deploying the u the two solutions for for safety for security uh and I feel much more of that message uh deserves to be to be shared in Japan. And so so hopefully through the panels like this we can hear each other uh we can share the stories through the through the conferences like atcon uh but much more to be done and we do talk about it at the foundation what uh what should happen in Japan uh like

what we should tell in Japan to explain it better to provide better education materials to to have those uh more of the large institutions that feel very comfortable with Ethereum that they want to he advocates for Ethereum um because I see it consistency in other countries. >> Ash, >> thank you. >> Thanks, Simsh. Um yeah, I'll echo a lot of that. The best form of sales is education. Um and so education u means both us listening and us explaining um and also us coordinating. Um there are infrastructure experts um in the custody space. all of all of the different sectors Damar is referencing earlier in

the talk, but we have access to those and it's our job um to be able to both empower local providers but international to come in and help Japan, right? Um Ethereum is not the 180 employees at the Ethereum Foundation. and it's the 35,000 plus um employees that are attached and working for um companies built on Ethereum. Um and that is the richness of Ethereum.

It's the expert knowledge like the the DNA of Ethereum is, you know, security first and every single one of these companies understands that. They're built with this vision in mind. you know, the auditing, the security auditors on Ethereum are the best in the world. Um, you know, they are building client infrastructure, their core developers, um, right through to auditing, you know, DeFi contracts that, you know, secure $70 billion in assets. Um so it's that expertise and interest and I think no other blockchain can attract the you know the minds that Ethereum can because of the nature of of this security first mindset. Um there is

obviously speed um uh tradeoffs with other with other chains and solutions at the L1 level. um you know scalability tradeoffs at the L1 level but this is what we're addressing with L2 to Tom Marsh's point um you know but ultimately the analogy is probably clear here if you're a UX engineer in the early 2000s are you going to go work for Google or are you going to go work for Apple and I think like that's a very clear decision you're going to go work for Apple now it's the same for Ethereum if you're a security re researcher or an engineer looking to address the world's biggest problem, the transaction settlement layer. Um, then you know, you'll

probably find a home um at Ethereum. Um, and I think that's that's probably to sum it up, we're security first and and um that is what we care about. building a system that will last for hundreds of years maybe to be replaced by something far greater but the vision is definitely you know if you take the IPFS version you know it's to scale this to bars it's to scale it to other planets um not to get too lofty with it but that that's very much how we think about it and you know that's the main pitch I would say >> interesting so from Japanese corporation view so what is expectation to is foundation

I mean from Japanese yeah Tai and so >> so we are thinking about uh build real world use cases on chain uh we definitely choose uh most reliable >> reliable >> and secure chain >> and in this perspective is the most kind of reliable and secure because the uh the ising sensitive around 15 almost 10 And also uh the ner is uh p purely diversified like one one million or something and there are so many track records uh of use cases and also you have stable coins half of stable coins

issu issued on something like that. Of course there is kind of scalability or uh scalability challenge still but I think layer one layer two uh architecture is working well and yeah so yeah re reliability security is very important because uh if something happen after uh after launching some application or use cases on chain and if something incident happens on chain >> we as a enterprise cannot excuse by uh blaming uh this is that this is attribute to this protocol or something like that to clients. So yeah in this context and uh yeah we think ether it's

a would be a first choice >> interesting security liabilities Thomas I have question so what is a use case for example what kind of use case do you have like uh trading company or GT digital >> I mean when they when we look at Ethereum and Ethereum use cases so we can look at the Ethereum ecosystem including called DL2s. Um the here as mentioned the payments and the stable coins are definitely a killer use case and this is now having this exponential adoption and everyone talks about stable coins since 2025.

Um and obviously there is DeFi in the Ethereum ecosystem definitely the most uh the most advanced and the highest value locked ecosystem on the D5 space. is always leading on innovation having this uh uh this integrations of multiple independent protocols whether it's uh it's staking lending uh swapping solutions uh here Ash mentions the uh 70 billion dollar locked in uh in a ecosystem on Ethereum and many of the institutions now look at DeFi and they say okay now when we when you adopt stable coins when we integrate blockchains they won't be that that long a time before we start integrating

solutions that are in D5. That was one of my major surprises in the last month of last months of conversations that institutions immediately look at DeFi uh the moment they have the stable coins adoption and then uh and then you realize the the access to to lending to swapping to uh all all the all the financial instruments on chain and just behind this you have the token tokenization of equity and even more the direct issuance on chain. So when you hear NASDAQ talking about uh tokenization of equities but also the US regulators talk about the direct issuance of equities on chain and many of the countries follow the the lead of

the US regulators that now say innovate try and rate will regulate saying what is being adopted and what works well. Uh so so we may see acceleration of those use cases that were so so popular in Ethereum right so so payments tokenization systems ERC20 the standard that uh that comes from Ethereum that is on Ethereum that is related to EVM chains uh this is a has been a major use case from the times when it started leading the ICO booms and then uh evolved into tokenization of traditional assets tokenization of private depth actually private depth tokenization and also the the treasury debt tokenization are the major use cases now around real

world assets. If you track there is a website rwi.xyz it shows the dominance of ethereum and its L2s uh on the on the real world tokenization uh the same for stable coins. So on Ethereum uh we have I think around 60% 57% of all the stable coins are on Ethereum. And if you add that uh this this talking about Ethereum mainet if you add to that uh the Ethereum L2s those numbers go all the way to 70 80% in some cases uh what are we talking about the ruled assets or stable coins directly uh private debt so uh so one after another all of this happens and then you go beyond to the

cases like IP NFTs particular Japanese market I think was very very interested in NFTs and IP opportunities in 23 sure it was a temporary boom when when there was a lot of hype around NFTs and some companies learned somebody some companies burned a bit uh like themselves on the on the NFT wave uh but they learn and there will be lots of opportunities I guess and that's NFT features on it are also definitely dominant many more use cases >> so many things do you have any expectation to from MDT's perspective Amazon perspective >> not only from an entity perspective but

um you know the Ethereum is obviously the biggest advantage of Ethereum foundation is obviously the strong team and uh communities and uh I mean the the the the whole piling up of you know EIP ERC is clearly showing that the strong strengths of the communities and that is a source of the uh you know confidence from from developer standpoint and uh you know obviously is a layer one is a layer one and a lot of use cases is expected to more to come >> and to make it happen you know the most important part is a stability of the

chain operation and also the uh uh uh is easiness of a uh the develop development And you know uh I mean it's open source so uh I mean so uh the all I mean important foundation is uh the Ethereum obviously have a all those important foundation to to be accept adapted as the defact standard layer one chain I believe and one thing that I'm impressed here today now is a you know ash and She's also you know addressing a very important pain to for

enterprise to adapt the blockchain for instance the security part and the KYC part and also the privacy pool was discussed a lot and that is another one another aspect that everyone has to pay attention to to use blockchain for enterprise purposes. Yeah. And what I want to say is that I mean the Ethereum's strength is to uh be you know active proactive and vital >> with the community developer communities and users communities >> and uh I mean I I I I I mean I appreciate if you can maintain sustain that that part >> interesting users community is very important right okay so we don't have so

much time maybe five minutes left and uh lastly I have a question so what is the road map or what is your vision into Japanese market or into the world or global? So do you have uh any vision or road map from your perspective or MD perspective? Well, NT is a like I said uh we are infrastructure company and we are uh trying to make web three as easy as possible to be accepted as in easiest way and uh uh we have a two major pillars. Uh one is providing a wallet uh to to to our customers and also uh we are uh uh participating in uh validating

work of a uh uh pro stake blockchains. So uh yeah so u uh from our standpoint we we like I said LT can contribute to the development of the entire internet world from telecom carrier standpoint and web 3 is not an exception. >> So yeah I'm really excited to be to work with E3. >> Thank you. >> Thank you. I think that uh for us the road map since like I I joined it foundation in in March to maybe maybe I can talk a bit more about my focus on the road map the first first few months we started talking about the three goals

for Ethereum scale one scale two improve interop and UX and that was that was short-term goals immediate response to what community was talking about that those those areas felt a bit neglected that we didn't talk about scaling and Now with the upgrades to the Ethereum network with Fusak and Glamsterdam, we show the deliveries of scaling both the L1 NL2s for the blob support the interop features are are finalizing with a lot of work uh that will be presented uh during dev connect in bonosirus. Now um as as we thought that this is the plan for one year so the fusak and glamster uh upgrades all the way to June next year around we also start talking

now about the medium-term and long-term goals. So medium-term first of all we start talking about linearium so addressing long-term uh security and scaling solutions. So we like taking over the the like linear scaling from improving the clients and some adjustment to pricing all the way to scaling through the ZKVMs. Uh so this will be the the big scaling effort of the of the midterm. So let's say next two years uh and changes a lot of technology promises a lot of exploration and research. Um midterm is also this renewed focus and uh and doubling down on privacy and security. So the trillion dollar security uh program will get much

more attention and the privacy teams now bringing privacy scaling aspirations team and and calling it privacy stewards for Ethereum bringing them closer to Ethereum foundation and helping the ecosystem to establish standards for privacy to build the uh privacy applications on chain solutions for enterprise. uh this will be definitely very very visible effort and the long term is bringing a lots of excitement towards AI and automation robotics explorations the novel AI governance mechanisms but this is this is bringing communities of the lots of new young um like energetic founders that want to talk about the next 10 years of Ethereum so that's the road map

>> interesting thank you >> so yes so corporation is now taking two approaches for blockchain Uh first approach is node operation and validator. Uh currently we are learning ether node operation and also a branch as well and we are planning to expand uh node operation bar business more and more and also uh we are taking another approach uh which is building real world use cases of course. So uh we have done uh some uh project related to global logistic interoperability uh co-working with chain link and border two years ago and as I mentioned we are now uh planning to use stable coins for cross border limitance as well. So we are

trying to build uh more use cases. >> So I think uh the blockchain enterprise adoption is just beginning. So we want to keep building. >> Thank you. Okay, >> I think um everyone's covered it pretty well. Um Tamar covered very much a broad vision. I'll dig a little deeper into the like Ethereum as financial market infrastructure. I think what's remarkable to me is that we're getting knocks on the door from, you know, BNY Melon and State Street, the largest custoders on Earth, 50 plus trillion dollars, and that's T, not B, um, stored within these institutions, and they're

looking at this technology and going, well, this is more than likely going to replace our technology stack. We're very very interested interested in ensuring that we adopt these custody solutions um standard charted um obviously with zodiac custody um built out a lot of um uh you know um options there for for different financial institutions but have recently just announced um in the last month and a half that they are custodying ETH and BTC on their balance sheet which I also think is remarkable that they've built their own custody solution. Um for me in terms of you know a clear road map step one um get

institutions comfortable with the idea of the Ethereum network and what does that mean getting your hands on with node operation. So I think either delegating working with validator services or running your own infrastructure that is an incredible step. And then the other way to get exposure to um you know that world is through the DATs the digital asset treasuries. Now obviously the US is leading there but I think there's an immense amount of opportunity for you know stock exchanges public entities around the globe to list um and these are going to be very innovative entities. they're all looking at staking um and then from there staking yield um so a little less risky um they're

looking to interact with DeFi. Now that is a conversation that is happening and that's remarkable in my opinion. If we could have publicly listed companies interacting with DeFi in the next year um that's a really special step forward. Um so in my opinion that's number one um now today. Um, number two, stable coins. We've seen this industry's growth, but for me, until we hit a trillion dollars, we really haven't got the engine even started. So, within the next 12 to 18 months, I think there's probably a pathway to have a trillion dollars on um, Ethereum. And so, both for slowmoving assets and fastmoving. So, being able to lend against different

crypto assets and take a stable coin out of that smart contract. and then fastm moving assets, stable coins through exchanges and payment flow on L2s. I think that that is going to be, you know, very much the next step. And I probably will leave it there at 18 months, but so I think they're the two big key pieces. Staking, understanding the Ethereum network through hands-on exposure to running this blockchain. I think that's the greatest invitation that we could ever make is for you as institutions to be a part of the network. and then you know stable coins and the proliferation of that industry.

>> Okay, really appreciate maybe time is up. So I figure out like Isa has a big potential because Japanese people like trust and secure. So you have a big potential. Thank you. Thank you so much.