By Peter Lee and Kagayaki (Kaga) Kawabata, Head of Global Business Development at Coincheck | 1/8/2018
Coincheck – https://coincheck.com/
LinkedIn Profile: Kagayaki (Kaga) Kawabata

Peter Lee: Tell us a little about yourself and Coincheck?

Kagayaki (Kaga) Kawabata: My name is Kagayaki (Kaga) Kawabata. I’m Head of Global business development from Coincheck the largest cryptocurrency exchange in Japan. Coincheck is also the largest bitcoin payment processor in Japan.

Finally, recently we started Fintech, Blockchain, Cryptocurrency & IT venture investment program with a preliminary funding cap of 50 million yen (about $450,000). I lead the program and we are seeking for investment opportunities both in Japan and international markets.

Peter: Do you have a goal for how large you want your venture investment program to eventually be? And, what type of investment opportunities are you looking for?

Kaga: We’re mainly doing a seed investment and looking for business synergy from a venture rather than capital gain (Of course we require capital gain but that’s not our sole purpose). Our main business driver is crypto exchange and bitcoin payment processing, but we are planning to expand our business to other Fintech business such as remittance, lending, and etc.

For us to become a company beyond an exchange, expansion of our business domain is essential. For us to expand our business and crypto market overall, we are looking for promising start-ups we can potentially collaborate.

Peter: Who are Coincheck’s customers?

Kaga: We provide a platform where users can buy and sell cryptocurrency with ease. By using Coincheck, users with no prior knowledge about cryptocurrency can start investing in cryptocurrencies. Coincheck provides 13 different cryptocurrencies.

Peter: Tell me a little more about the ‘Coincheck Payment’ component of your business. What is it and how substantial a part of your overall business is that component?

Kaga: Coincheck payment is bitcoin payment solution that enables website and merchants to start accepting bitcoin as a payment. Coincheck has over 90% market shares in Japan and number of merchants accepting bitcoin as a payment is increasing every year.

Currently, Coincheck payment business only consists fraction of our business but we believe it will be one of our main business drivers in the future as a real-world usage of cryptocurrency accelerate.

Peter: We’re seeing very limited bitcoin/cryptocurrency payment adoption here in the United States. What accounts for the substantially higher bitcoin payment adoption and larger comfort level with cryptocurrencies and bitcoin payment in Japan?

Kaga: Japan is the first country in the world that set clear rules and regulations for the cryptocurrency. Unlike China, the risk the country banning the cryptocurrency overall is very low which accelerate the adoption of cryptocurrency.

The clear regulation also encouraged a large noticeable company like GMO and SBI bank to enter the market uplifting the comfort level.

In addition, after an announcement of new regulation, major national media in Japan featured bitcoin dramatically increasing awareness of bitcoin. Around this time how people perceived changed and started to acknowledge as superior technology.

Peter: What don’t people know about Coincheck that they should?

Kaga: Our bitcoin trading platform has the largest bitcoin spot trading volume in the world. We have $35 billion bitcoin trading volume every month.

Peter: What is ‘Coincheck Lending’ and how is that component of your business coming along?

Kaga: With Coincheck lending, users can earn cryptocurrency (maximum 5% yearly rate) just by lending cryptocurrencies to Coincheck. User can lend and earn 13 different cryptocurrencies that Coincheck provides.

Peter: What has surprised you most about your journey with Coincheck?

Kaga: As an initial member of Coincheck, I watched the growth of Coincheck from the inside.

I’m surprised by the fact that in less than 2 years, Coincheck grew from a company less than 5 employees to a company with more than 70 employees. When I joined the company, how people perceive Bitcoin was terrible, thinking it’s money for a criminal. How Bitcoin and other cryptocurrency gained trust and popularity in such a short timespan is pretty amazing.

Peter: Aren’t there a lot of exchanges opening up in Japan? Is there or will there be enough business for everyone or do you see some type of consolidation as inevitable?

Kaga: There are a lot of new entrants including a large company. I think small exchanges will consolidate or disappear and only several of them will survive eventually.

Peter: What does Coincheck look like 5 or 10 years from now?

Kaga: I think the presence of bank will significantly diminish and landscape of financial industry will dramatically change in next 5 – 10 years.  We hope to be the next generation digital bank.

Peter: Japan seems to be leading the way right now in governmental regulation and acceptance of cryptocurrency exchanges and bitcoin use. If you could summarize, what would you say is the high level Japanese government’s plan or strategy here with regard to crytocurrencies?

Kaga: Cryptocurrency and blockchain is a market that Japan could be a global leader. I believe the Japanese government will continue to acknowledge the potential of cryptocurrency and nurture the market together with a company like us.

Peter: How will Coincheck improve the world for the future?

Kaga: There’s still a lot of inefficiency in this world that can be optimized. We believe money and finance is one of those areas that should be improved with technology. Coincheck will create new value for financial industry and increase the efficiency of money transactions with the power of technology.

Peter: What is your philosophy on life?

Kaga: I believe that nothing in life is worthwhile unless you take risks.