[Forefront of security tokens]“Imagination” for the future is essential for future progress: Interview with Liberal Democratic Party web3PT chairman Masaaki Taira

As the tokenization of real assets (RWA) becomes a major trend globally, “security tokens (digital securities)” are gaining momentum in Japan as well. Some companies have launched brands dedicated to security tokens.

The background of the attention of security tokens, the investment environment in Japan, expectations for security tokens, etc.Frontline of Security Talk”, we asked Masaaki Taira, chairman of the web3 project team (PT) of the Liberal Democratic Party Digital Society Promotion Headquarters.

Personal financial assets exceeding 2,000 trillion yen

According to the Bank of Japan, personal financial assets as of the end of March were 2,043 trillion yen (Shutterstock)

──The shift from savings to investment has been a long-standing trend. What are the biggest aims and biggest challenges of the “capital income doubling plan”?

First, there is a considerable volume of personal financial assets in Japan. At approximately 2,000 trillion yen, it is the largest in the world. However, the ratio of bank deposits is extremely high, and it is necessary to reconfirm the trend of “savings to investment,” as has been said for some time. Given that the population is expected to decline in the future and the number of working people is expected to decrease, it is extremely rational to have money work for you. In addition to having a sense of volume to begin with, there are also circumstances unique to Japan.

If we shift from bank deposits to various forms of financial assets, household income will increase as a result. In addition, it is positioned as a major theme of the New Capitalism Realization Conference to promote industrial development in the form of stock investment and to proceed in the form of a win-win-win situation.

──The shift from savings to investment has been talked about for decades, but progress has been slow.what is the biggest challenge

Some politicians still refer to investing as gambling. It is important to understand that “investment” and “speculation” are different things. When the GPIF (Government Pension Investment Fund) changed its portfolio, it received a lot of criticism, but in the end, in just five years after changing its portfolio, its assets under management increased from 140 trillion yen to 190 trillion yen. . First of all, it is necessary to provide financial education on “What is investment?”

On the other hand, we must acquire the literacy not to be deceived by suspicious stories, especially those related to crypto-assets such as “this crypto-asset is definitely profitable” or “nobody knows about this yet, but it is the second bitcoin”. need to put on.

In fact, it cannot be said that the financial literacy of Diet members is high. In fact, the lack of investment experience among Diet members may be a problem. That said, there are various regulations. For example, people like me who are involved in growth strategies in the ruling party are self-regulating even more than regulations. I’ll be honest, I’ve never bought or sold a stock. That insensitivity to the skin could be fatal. Even if you understand it as knowledge, you don’t have skin sensation.

Importance of imagination

── On the other hand, there are reports that investment troubles among young people are increasing rapidly. We often see information about the so-called “FIRE”. What are your thoughts on these situations?Also, what should be done as a countermeasure?

I believe that we must do our utmost to protect consumers, investors, and improve financial literacy. Web3 became a hot topic about a year ago, and I had the opportunity to explain Web3 to a comedy duo on AbemaTV. I explained various things, and at the end I was asked, “So what exactly should we do?” You must never ride,” he replied. One of the duo replied, “There are a lot of stories like that.” Nowadays, it is easy for such stories to spread on SNS, and some people are convinced that they are trying to deceive them. An ecosystem in which damage spreads has been created. Therefore, the Financial Services Agency and others are calling attention to it, but it is also necessary to send messages directly to the ecosystem, where damage is likely to spread, in a form that is easy for young people to understand, rather than conveying it in a bureaucratic tone. I think that.

Financial education is very important, but it cannot be covered by existing education. Furthermore, AI will come in, and the skills of those who deceive will rise steadily. It can be assumed that AI will pretend to be a lover and approach. It is necessary for the government office to respond to the evolution of technology, and to use the imagination of where and what kind of damage is likely to occur, and to take early measures. If we say that this kind of law is necessary because this kind of damage is occurring, it will be delayed by about three years. Regulators and us row makers are now required to imagine what will happen if technology advances.

──In the sense of imagination, I felt that the word “predictability” was a key point when looking at the materials of the “Conference for the Realization of New Capitalism” and the web3PT white paper.

Predictability is a bit more down-to-earth, and more explicit about whether government policies will continue and how long tax incentives and subsidies will last when private companies invest in certain fields. that you have to. Otherwise, predictability will not be created, investment will be difficult, and companies will get lost.

This predictability is one of the reasons why Japan is attracting global attention, even though it is now called “Crypto Winter”. The countries where new technology comes in and the first excitement is the countries of “Anglo-American law”. Once the service is ready, it will be implemented, and if a problem arises, it will be resolved by law enforcement. On the other hand, since Japan is a “continental law,” regulations come first, and what is not written there becomes a gray zone, and large companies cannot enter due to compliance issues. This leads to the difference in sense of speed between Anglo-American law and civil law. The leaders are always the US, the UK, just the UK and the US, followed by Singapore, Israel, and so on.

However, after one lap, when I say what is happening now, especially in America, I didn’t say anything, so I did it. Just as the judicial system has yet to reach a settlement, the regulatory authorities have stepped in and said, “That’s no good.” A state like rock paper scissors. On the other hand, although progress has been slow, Japan has developed regulations step by step with the understanding of us row makers. Once you decide, it is very unlikely that you will be told no later. Predictability is a big factor in growth.

Furthermore, as competition for innovation intensifies, it is not necessary to increase the predictability of tax systems and subsidies over a long span of 5 or 10 years, rather than a single year or two or three years, to attract investment. With that in mind, we are consciously incorporating it into our growth strategy and basic policy.

What to expect from security tokens

──Amidst the trend of “from savings to investment,”security tokenwhere to expect

I think security tokens are still in the process of evolution, but the biggest advantage is that they are tied to real assets. Compared to crypto assets that also use blockchain technology, there is a clear backing and a sense of security. In addition, the use of blockchain has the advantage of simplifying composition and lowering running costs. Projects that could only be invested in large-scale units in the past can now be made smaller. Projects that cost 500 million yen or 1 billion yen per unit will be extremely small, and investment will be possible from 1000 yen or 10,000 yen.

When young people think about investment with limited income, the options will be greatly expanded, and the investor base will be expanded. On the other hand, those who want to raise funds have more options. In other words, diversification and miniaturization of investment and financing will progress. I think that’s the real value.

──The challenge for that is to enhance the lineup of projectsI wonder

As an industry, I think it will be essential to try various projects. For example, a project like the restoration of an old private house, although the amount of money is not so large, is not profitable as a project because of the legal costs and the costs of brokerage companies, etc. at present. Once a decentralized and autonomous format is in place by leveraging security tokens, such projects will be able to leverage security tokens. Smaller projects will become easier than ever. Currently, securities companies play a central role, but in the future, security tokens that do not involve securities companies may even become mainstream. It’s still in its infancy, so securities companies are controlling it, linking it to real value, and creating a system that won’t cause problems. shape can be considered. How to connect to such a future image may be important.

In addition, there is currently no secondary market (distribution market). If a secondary market is established, it will be possible to exchange money at any time, the circulation will expand, and it will be easier to buy. Furthermore, if a market is created, there is a possibility that the value will increase more than now. Some people may see higher value in security tokens purchased for 100,000 yen each.

When there is a secondary market, it’s a little brain-teasing, but if it’s based on smart contracts, you can also create a mechanism that will bring money into the project every time it’s resold. It is also possible to create a system in which profits are returned to those who take risks and work on projects, rather than a system in which only those who resell them make a profit. There is a possibility that a world different from conventional securities will be born.

Current security tokens are not necessarily fully utilizing the potential of blockchain. However, there are many possibilities for the future ahead.

──What is the position of security tokens in web3PT?

Security tokens are a relatively uncontroversial subject as they are within the framework of financial regulation. If there’s room for debate, it’s about the future. A story beyond the “digitization of securities”. As I mentioned earlier, how do we connect to such a future? This is where imagination is needed.

It is generally said that the advantage of blockchain is that it does not require an intermediary. Ultimately, securities companies are now required to clarify what role they will play in a world where security tokens will evolve and the need for securities companies will disappear. The question is what kind of value should be found in an ecosystem where new technologies have entered. It is the imagination of how the world will change, and I believe that diversity and inclusion are essential to management.

— security tokens, andsecurity tokenWhat we expect from an industry that is committed to

I have high hopes for new initiatives using new technologies. When we focus on the future vision that lies ahead and the inherent value and functions of blockchain, we may lose our existing business and portfolio that currently secures a certain level of profit. At that time, I think that ideas about how to contribute can be sought. What kind of future image can be drawn in the big context of Web3?

For example, security tokens are now being used by each company’s own wallet. However, it should eventually become an open wallet. If that happens, the wallet will contain crypto assets, NFTs, and stable coins. what will happen at that time? Permission-type wallets issued by securities companies may not be used forever. From now on, I think it will change more and more.

｜Interview and text: Takayuki Masuda
｜Photo: Airi Okonogi

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