6 Questions for Kei Oda: From Goldman Sachs to cryptocurrency

Kei Oda is the head of Japan and the Asia-Pacific area for Quantstamp, a Web3 security company that audits clever agreements and establishes blockchain security solutions.

Kei invested 16 years trading bonds at Goldman Sachs before stumbling into cryptocurrencies out of monotony. He tells Magazine he was caused by the ability to trade Bitcoin and other possessions all the time.

He has given that dropped the rabbit hole, even finding a job in the market.

1. How did you get associated with crypto?

Essentially, my attention span ended up being like a goldfish, and that was what working in financing sort of did to me. Therefore, I began trading Bitcoin.

And as part of that journey, I naturally dropped the rabbit hole and began looking at crypto in general and specific properties like Ethereum, and it simply sounded like a crazy, insane proposal. You know, if it prospers, obviously were talking about something that might be game-changing.

It was merely to pass the time. And then, as soon as I began looking into Bitcoin, undoubtedly, I thought the value proposition was very engaging.

You understand, we utilized to discuss Bitcoin when I was still trading bonds. I didnt really understand it or think in it, to be honest, however when I left my job in 2016 and tried to enter into the start-up space, what occurred to me once I left was that, having actually been a trader, you do have a long-term focus, however you likewise are really, really short-term in terms of how you trade, what you do daily, minute to minute, and what wound up taking place was, I would get bored very easily.

So, I was in fact a bond trader for 16 years before signing up with crypto..

2. What do you think about the existing Japanese crypto environment?

It practically feels like the Japanese crypto blockchain community has actually broken off a bit from the remainder of the world, or at least the cycles appear to be a little bit displaced in the sense that were starting to see really excellent interest and good activity from big business in Japan. Whereas I believe that probably happened a little bit earlier in other markets and has now kind of diminished.

I think that Japan has a quite lively community, specifically right now. Its taken a while, but if you take a look at the trajectory of what Japan has actually gone through as an entire (the Mt.Gox and CoinCheck hacks, etc), it has actually ended up being extremely progressive.

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I think another kind of sector that seems to be quite amazing, at least for Japanese monetary companies, is security tokens. I think thats something that individuals are looking at.

In one sense, you understand, allowing Bitcoin to be kind of utilized as currency, not undoubtedly as a main currency or government currency, but it is an accepted payment technique, and its really legal to use it.

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3. What has held the Japanese crypto scene back?

Now, if you compare that to Singapore, the standard tax rate is much, much lower at around 20% or something. Hong Kong, I believe, is something comparable. Dubai clearly has absolutely no income tax. So, youre speaking about a pretty huge difference financially for startup founders and business owners.

What the old policy utilized to be is that if your Japanese start-up provided a token here in Japan and you offered half of it to Japanese investors or the Japanese neighborhood, then you would need to pay tax on the revenue that you understood by offering tokens. You would also have to pay tax on the 50% that you had not sold.

Its even worse for personal taxes. In Japan, earnings on crypto trading are taxed as extra-ordinary earnings, which can be as much as 55%. Its not super friendly.

I believe at the bottom of it all is tax. Taxation is still not extremely friendly here in Japan.

Related: An introduction of the cryptocurrency policies in Japan.

4. Do you believe more business will begin establishing in Japan rather of deciding for other Asian hubs?

However you understand– excuse my language– its sort of a shitshow.So, what I did was help to develop an occasion [ Tokyo Blockchain Night] where theres no discussion– no ones trying to sell anything.Its simply like-minded individuals being able to have a drink and talk about crypto and look for financiers, engineers, and so on, or simply make friends.I think its something that helps individuals and goes along with the entire sort of values we have at Quantstamp, which is that we help people and pay it forward, and ideally, something returns to us.

The Japanese crypto scene is rather active. What I discover is that, when you go to a Japanese meet-up, there is a long presentation that you have to sit through. And at the end, they give you 5 to 10 minutes to attempt and network.

Theyre attempting to be extremely active in getting skill to stay in Japan and likewise to come to Japan.

The Japanese government is attempting to be really progressive and forward-thinking about Web3.

The federal government is preparing digital nomad visas. And I think that is going to be fantastic for people who earn in other currencies and come to Japan, even if the yen has actually become a lot more attractive (compromising versus the United States dollar). Japan is likewise attractive due to the fact that there is a big market here, and there is a huge market size that startups can record here.

6. How did contagion from collapses like FTX effect the Japanese market?

I believe the Japanese policies that was available in after the CoinCheck hack were most likely far more rigorous than other jurisdictions; however, as a result of that, were now seeing an uptick in Japanese activity, to the point where the MUFG, the worlds most significant banking corporation in Japan, is going to launch stablecoins.

Whereas if youre a client of FTX International, I do not know what the upgrade exists, however its not looking that appealing.

The method FTX essentially exploded is sort of intriguing because FTX had a Japanese subsidiary; they purchased a Japanese exchange called Liquid.

And since the policies around asset custody in Japan were much stricter, FTX Japan wasnt able to commingle funds or anything like that. So, actually, the Japanese entity was totally liquid and solvent. To the point where, if you were a Japanese client of FTX, you essentially either have or will get all of your cash back.

I think another kind of sector that seems to be quite amazing, at least for Japanese financial companies, is security tokens. In Japan, earnings on crypto trading are taxed as extra-ordinary earnings, which can be as much as 55%. And I think that is going to be great for individuals who earn in other currencies and come to Japan, simply because the yen has actually ended up being so much more appealing (damaging versus the United States dollar). Japan is also attractive since there is a huge market here, and there is a big market size that startups can capture here.

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And due to the fact that the guidelines around asset custody in Japan were much more stringent, FTX Japan wasnt able to commingle funds or anything like that.

Brian Quarmby.
Brian Quarmby discovered crypto in 2013 and immediately fell in love with the concept of decentralization. Brian has given that lived and worked Asia and went back to Melbourne in late 2019. Brian is a lover of sport and art and is bullish on the potential for NFTs to transform artists lives in the near future.

Other Questions People Ask

How did Kei Oda transition from Goldman Sachs to cryptocurrency?

Kei Oda transitioned from Goldman Sachs to cryptocurrency after feeling a sense of monotony in his long career as a bond trader. He began trading Bitcoin out of boredom and quickly became fascinated by the potential of cryptocurrencies. This curiosity led him to explore various digital assets, ultimately resulting in a career shift into the crypto space, where he now leads efforts in blockchain security at Quantstamp.

What is Kei Oda's perspective on the Japanese crypto environment?

Kei Oda believes that the Japanese crypto environment has developed a unique identity, somewhat detached from global trends. He notes that while other markets have experienced earlier surges in interest, Japan is now seeing significant engagement from major corporations. This shift reflects a vibrant community that has evolved through past challenges, such as the Mt. Gox and CoinCheck incidents, leading to a more progressive outlook on blockchain technology.

What challenges does the Japanese crypto scene face according to Kei Oda?

Kei Oda points out that taxation is a significant hurdle for the Japanese crypto scene, with high rates impacting startup founders and investors. He highlights that the tax implications for trading and token sales can be quite severe compared to other regions like Singapore or Dubai. This unfriendly tax environment can deter innovation and growth within the local cryptocurrency market.

How have recent collapses like FTX affected the Japanese cryptocurrency market?

Kei Oda notes that Japan's regulatory framework became stricter following incidents like the CoinCheck hack, which has ultimately led to increased activity in the market. The rigorous regulations have created a safer environment for investors, prompting major players like MUFG to explore stablecoin offerings. This cautious yet proactive approach has positioned Japan favorably in the evolving landscape of cryptocurrency.