Vice President of D-Cash DCP transitions to Vice President COO of HashPort──From digital currency to Wallet【Emergency interview with Kazuhiro Tokida】 | CoinDesk JAPAN

A person who was at the forefront of tokenized deposits (digital currency that tokenizes bank deposits) has changed their field to unhosted Wallets.

Kazuhira Tokita, who served as the Executive Vice President COO of DeCurret DCP promoting the digital currency DCJPY, has been appointed as the Executive Vice President COO of HashPort. DCJPY achieved its first commercial launch of digital asset token settlement transactions last August, and in September, its parent company DeCurret Holdings raised a total of 6.349 billion yen to strengthen the business foundation of the DCJPY network. The timing of this transition, just as things are about to take off, is surprising.

I asked Mr. Tokita about the reasons for the transition to HashPort, the new role he will take on, and the business he aims to pursue.

Achieving a Milestone with Digital Coins

──The news of the appointment of HashPort’s Vice President and COO is causing ripples in the industry. I would like to hear about the circumstances and background of this transition.

Mr. Tokida: It may take a little while, but I founded DC in 2018, thinking about creating a value exchange platform that would allow various values to be converted into digital assets and exchanged. I believed that various digital assets such as cryptocurrencies, stablecoins, or security tokens (ST) would be exchanged on the internet. At that time, cryptocurrencies were leading in scale, so I obtained a license for cryptocurrency exchange business and started the operation.

On the other hand, around 2018 and 2019, there was no outlook at all for stablecoins. However, it was believed that as long as fiat currency could not be used, the world of digital assets would not expand. Therefore, starting in 2020, efforts were made to work on digital currency, aiming for something that both individuals and corporations could use, focusing on tokenizing bank deposits on the blockchain. This is referred to as tokenized deposits.

As efforts progress, regulations for stablecoins have been established in Japan, and concurrently, the issuance of security tokens has increased. In August of last year, DCJPY achieved the first commercialization phase by enabling the digital assetization of environmental value and settlement transactions for tokenized deposits. With an increasing number of banks issuing DCJPY and a growing user base, an environment has been created that allows for large-scale fundraising. While this marks a milestone on the path to realization with digital currency, a significant step has been achieved.

Of course, there was also the option to continue with digital coins as they are, but on the other hand, Japan still faces the challenge of not having an environment in place for the general public to utilize digital assets. It’s not just a regulatory issue; business practices and the affinity towards digital are also hurdles.

However, on a global scale, non-custodial wallets like MetaMask are becoming popular, and the trading share of DEX (decentralized exchanges) is also high. There are various products in digital assets, and tokens circulate borderlessly. There is a significant gap between the global market and Japan. While fiat-backed digital currencies are one necessary element, I felt that there is a need to engage in a broader range of activities.

──Is the initiative of HashPort’s unhosted Wallet what this refers to?

Mr. Tokida: HashPort is currently conducting a large-scale social experiment regarding unhosted Wallets at the “Osaka-Kansai Expo”, allowing many people, regardless of their experience with crypto assets and NFTs or their age, to experience the “EXPO2025 Digital Wallet”. We are working to have an unspecified number of visitors to the expo use it. I believe that such initiatives are crucial for the spread of Web3.

It may take some time, but just as various corporations and individuals have bank accounts, a world will surely come where they hold wallets and use digital assets such as tokenized deposits, stablecoins, security tokens, cryptocurrencies, and NFTs held in their wallets for business and daily life.

There are many credit cards available globally that can use cryptocurrency. Naturally, as the amount of cryptocurrency in an individual’s assets increases, the demand for payments using cryptocurrency will arise. It is necessary to implement functions for such use cases and widely approach the market. I also want to move into that field and start my activities.

Sharing the sense of crisis regarding the current situation in Japan

──The initiative for digital coin has reached a certain milestone, but those around must have been surprised.

Mr. Tokida: “There were many people who thought that I would continue to work on digital coins at DC. There were also some who directly asked within the company, ‘Why are you quitting?’”

Tokenized deposits have faced very high hurdles to commercialization. No one has done it before, and there are fundamental questions about whether it is acceptable to place deposits on the blockchain, which have been discussed by not only banks but also by important organizations such as regulators and deposit insurance agencies that play crucial roles. For companies that will become users, there is no need to change anything as they will treat deposits the same from an accounting perspective, but discussions have been held with accounting audit firms regarding this matter.

The bank issuing DCJPY started with GMO Aozora Net Bank, which is touted as a digital bank, but more banks are expected to join in the future. If the number of banks increases, interbank settlements will become more efficient than the current system. In that sense, I believe we have presented one solution to the challenges of the current financial infrastructure. However, in fact, about a year ago, I had no thoughts of moving to another option at all.

──Was there a trigger that brought about a change in mindset?

Mr. Tokida: One was a strong approach from the representative, Yoshida. We discussed initiatives at the Osaka-Kansai Expo, the gap between global and Japanese perspectives, and the situation of emerging countries showing leapfrog advancements. We shared a sense of crisis that if Japan continues to avoid cryptocurrency as it is now, Web3 will struggle to expand.

HashPort’s efforts will be one of the solutions to realize the world of Web3. Especially for the younger generation, I believe that cryptocurrencies should be provided as an important option for long-term asset formation.

Approach companies with a points economy

〈EXPO2025 Digital Wallet〉──What will be the mission as the Executive Vice President COO at HashPort?

Mr. Tokida: I hold the position of the business leader. My mission is to formulate and achieve plans regarding what kind of business HashPort will pursue and what milestones we will reach. Specifically, my main role is to drive the entire business regarding how to develop the unhosted Wallet into a product, who to target, in what form, when, and to what scale we will roll it out, and I understand that my position is supportive of Yoshida in the overall management.

HashPort is in a position to continue providing services to users of the “EXPO2025 Digital Wallet” even after the completion of the Osaka-Kansai Expo. One aspect is the BtoC business development that can leverage this. However, rather than expanding BtoC solely with our own strength, we believe it is possible to connect with various partner companies, either by linking them to our Wallet or by having the front-facing branding and names be those of each company, while the backend operates on HashPort’s Wallet. We are starting our approach with the assumption that various companies with point economic zones will become partners.

There are already companies that offer services for investing in cryptocurrencies using points, but these services are still limited, such as being restricted to Bitcoin. When viewed globally, there are DEX (decentralized exchanges) behind the scenes that allow for investments at very low transaction costs. Currently, using DEX is quite difficult, but we want to provide a connection to DeFi (decentralized finance) through unhosted Wallets.

We believe it is important to first allow users to experience it widely rather than making high-value transactions all of a sudden. We are advancing the project while confirming legal systems and regulations, such as enabling investments with points. By closely collaborating with various partner companies, we aim to reach millions or even tens of millions of users.

──When collaborating with partners, the experience gained from various collaborations with companies through the Diacallet DCP will come into play.

Mr. Tokida: I believe that Yoshida and the shareholders expect us to focus on that. In BtoB, it is important to build a relationship of trust, balancing the interests of both parties, and creating a relationship that can be sustained in the long term. It is necessary to build relationships that last 10 or 20 years, and I believe that my past experiences will be beneficial in this regard.

Easy access to DEX and DeFi

──It is said that companies with a point economy are the target, but such companies are limited, and they may already have started their own Wallet initiatives.

Mr. Tokida: While some companies have already started, the situation is not one where sufficient collaboration with the existing economic zones has been established, and I see it as a trial phase. I believe there will definitely be opportunities for reassessment as it expands in the future.

Moreover, we will enable swaps for dozens of types of tokens and also introduce staking. It may take a little while, but yield farming is also on the horizon. Among these, there will likely be services that are difficult to find in traditional cryptocurrency exchanges. Our goal is to open access to such services for users who have not experienced them before, and our approach to the market is significantly different.

Currently, while sounding out credit card companies and QR code payment companies, we are updating the product design and approaching them. The use of Web3 and DEX is not yet at a stage of full-scale adoption, and there is still plenty of opportunity for us.

──The use of DEX, broadly speaking, the efforts towards DeFi (Decentralized Finance) have also been mentioned recently by Mr. Yoshida. Are there no regulatory issues?

Mr. Tokita: Currently, I understand that individuals are not restricted from using it in their own environments. However, the difficulty level of the usage environment is high, and only those who are quite knowledgeable can engage with it. When I started on my own, I didn’t really understand it either. After trying it for a few months, I was able to understand it a bit.

The structure of DeFi is complex, and it can be confusing to suddenly hear terms like “unhosted Wallet” and “DEX aggregator” that vary by chain. We want to eliminate the hurdles of such an environment with the UX of our unhosted Wallet.

The examination of legal regulations for intermediary businesses in cryptocurrency and electronic payment methods has also progressed, so there is a possibility of registering as an intermediary and expanding services. Seamlessly connecting domestic electronic payment methods and cryptocurrency transactions with transactions conducted on DEX, for example, we can consider use cases where we, as an intermediary, convert Japanese yen into stablecoins with domestic electronic payment providers, connect to DEX, and then convert the assets managed there back into Japanese yen.

Clarifying the “turning point” also clarifies the goal

〈At the Osaka-Kansai Expo, the “EXPO2025 Digital Wallet” can be considered a social experiment〉──Although this will be a theme somewhat removed from business, what have I valued in terms of organizational management and leadership throughout my career as a CxO and executive?

Mr. Tokita: Engaging in business in a new field is always a challenge. It is meaningless to state the obvious or speak the truth if there are no results. Additionally, if one does not constantly keep the objective in mind while working, it can greatly affect performance and goal achievement. I place great importance on the objective and the awareness of achieving that objective.

Additionally, startups are often influenced by external factors. In the case of HashPort, whether the Osaka-Kansai Expo itself will be a great success or fall short of expectations will change the story moving forward. In such cases, it is also important to clearly make decisions regarding “what was the goal,” “what were the results,” and based on those results, “what will be changed.” Whether things go well or not, making clear decisions and defining the “turning point” is crucial. By clarifying the turning point, the next goals also become clear.

──Were there any differences when looking at HashPort or Mr. Yoshida from the outside compared to actually being inside?

Mr. Tokita: There are indeed differences. From the outside, Yoshida seems to be a person full of hospitality, but once you get inside, he actively takes actions, and those actions are based on ideas that stem from various experiences he has accumulated.

However, on the other hand, there are situations where Yoshida moves ahead alone, and everyone desperately tries to keep up. This is common in startups that seek a sense of speed, and it gives the impression that only the leader’s gears at the center are moving ahead. I believe that when Yoshida increases the speed, it is necessary for the entire organization to speed up, and at times, to reduce to an appropriate speed to mesh the gears.

The emergence of stablecoins is a great opportunity

──What do you think is currently lacking and what is needed for Web3 mass adoption?

Mr. Tokida: I believe what is lacking is a clear “trigger”. Even if we release a new app, it doesn’t get downloaded easily. It is indeed easier to use something that is familiar, something that is already in use, or something that is connected or embedded in what they always use. An image like “buying Bitcoin with a QR code payment app”. That’s why I think it’s necessary to have integrations that are user-friendly.

Yoshida often talks about the differences between the business models of PayPal and Stripe. PayPal is used consciously by users, while Stripe is integrated into the services of businesses, and users use it without being aware of the backend payment provider. He believes it is important to develop a service model that approaches users through apps they commonly use, such as payment and point apps, without any discomfort.

One more point to add is that the emergence of stablecoins is extremely significant for the utilization and spread of digital assets. With stablecoins that hold a value similar to fiat currency, a “pivot” is created, allowing for seamless exchanges with cryptocurrencies, NFTs, and security tokens (ST) through smart contracts for asset management. Furthermore, in the future, as unhosted Wallets evolve, the environment for using stablecoins will be established, and use cases are expected to expand.

I want to show some results in this field within 1 or 2 years. I hope you will expect that.