The interview of our CEO is published on Cointelegraph Japan

The interview of the CEO of BTCBOX Tsuji Harutoshi is published on Cointelegraph Japan.

With the outlook of the year 2020, he talks about the Company’s aim of ideal cryptocurrency. We have the English translation as well, so make sure to take a look at it.

For the Japanese version, please click here Cointelegraph Japan Homepage.


What happened in the business scene of cryptocurrency of this year, 2019 ?

In January 2019, the price of BTC was started in the 300,000 Yen Range and continued deflating the way it was, leading to a drifting give-up boom in this overall industry. Under such circumstances, when searching for where the next stage, from May to June we were able to see it surpassing the 1,300,000 Yen mark. This was the moment to we could validate that Bitcoin had value. Security companies call this the Restoration of Half-Price returns.

On the other hand, the movement in China was also impressive. The unbalance of its situation was that, with the idea of aiming at becoming a major blockchain industry country by adopting blockchain technique as a tool core technology for future development, but at the same time not allowing for expansion of managed currencies by the blockchains. The generation of new blockchain technology in the China’s centralism wells up deep interest within me.

What would be important keywords or themes for cryptocurrency or Bitcoin for the year 2020?

① Leverage and Travel rules
2020 will be a year where the cryptocurrency exchange industry will become an ordinary financial instrument with these keywords. Similar to gold as with no means of operation, cryptocurrency is maintaining its value only due to its scarcity. Its leverage scale factor will be restricted just like the operation of legal tender, and even the operation of coin transfer will become restrictive. The only way to overcome such handicap is by strain our intelligence as managers.

② Token (Sleeper Coin)
The ICO and Sleeper coin selections through 2017 were contributed to creating many business in this market, but in 2019 a lot of Sleeper coin exchanges were closed like being swept by a heavy swell . In contrast to that, we are anticipating the beginning of the era of tokens on the year 2020. With the Financial Settlement Act and Financial Instrument and Exchange Law, the legal positioning of cryptocurrency tokens have become clear, and as the legal regulations have become clear, the framework issuance has been well organized.

Can the Travel rules alter the state of cryptocurrency?

Travel rules are among the virtual assets service providers (VASP) including cryptocurrency exchanges and wallet provider, determining the rule of customer information that shall be mutually shared at a time of virtual assets deposition.

According to the recommendation of FATF, in 2020 even within Japan there is a need of promoting maintenance of shared information rules, protocol etc. However, I would like us to think with a cool head. In this emergent industry, in regard with the Banking industry being the superior among the conventional financial instrument, why is there a assumed outflow of a huge investment just like the banking industry?

What FATF is requesting from VASP is very simple Travel rule content. It does not exceed any other standard AML measure request like those of financial instruments and banks. Therefore, we can not deny this, and with its superior simplicity there is no way to detect any margin for correction.

I have a concern of these rules might get involved in the core thought behind cryptocurrency, however for this industry to be established as a financial infrastructure, the very reason of already configured matters have became a big problem must be cleared out by all means. Giving it the rough and ready thought, if we set up a special communication protocol like SWIFT as a commonness in the industry, and might be arranged if the network is constructed with a great fund sum. In other words, if you have thick connections in the banking industry, and also have the knowledge and the financials for the issue, it can be solved. But, is it really acceptable like that ?

Compared to current constructed system of banks, I think it is a very unique method for sending cryptocurrency deposit in a very simple manner like emailing the information with the premise on it being encrypted.

The proprietary special characteristics and property etc. by nature that cryptocurrency had, was obligated to take the conventional form and became very similar to the “ordinary” deposit method. Due to this, there is an uneasiness of not being able to secure speed along with costs predominantly . Much less to mention that, unlike fiat currencies, cryptocurrencies with no means of fund operation but that are maintaining their value through the scarcity of GOLD, in regards to the meaning of its existence and practicality, I believe that depending on the measures will have enormous influence the results.

Until now, following as an extension of the current circumstances, there have been discussions on the premise that the exchanges will undertake the central role of cryptocurrency transfer. However, another course for this would be the possibility of segregation of exchange functions and asset transfer functions.

In cryptocurrency where the world of P2P is prospering, there is no need for any exchange particularities regarding transfers. Executing transfers on one’s own responsibility to an address that the individual can consent to and feel safe about, I believe that this is what should be the nature of cryptocurrency. Thus, infrastructure is the wallet application that holds transfer functions and also for storing the secret key for individual wallets. Furthermore, the exchanges shall specialize in cryptocurrency circulation. Even if these kind of circumstances become normalized, it is not like transfer will not be executed through exchanges, but it is required that we do support “Travel rules”as an exchange.

I have high expectations for how constructing networks and protocols will make this industry present us with innovative measures making practical use of FinTech in contrast to traditional financial instruments.

With the Financial Instruments and Exchange Act of 2020 New Token Economy shall begin

In 2017 the ICO bubble occurred in Japan, hence resulted in regulations established in 2018, and various projects deflated in one go. Many Sleeper coin exchanges migrated to foreign exchanges and continued their operation of the exchange, however the current situation for exchanges abroad has also become very difficult in 2019. The non-existing regulations of Sleeper coin exchanges is at a point of declining globally, and as for Japan is in a preparatory phase of establishing regulation.

In Japan, legal status of security token and utility token have been defined, and the token economy will at last begin within the legal framework by 2020. I think that if there is no increase in new economic bloc within framework, then there will be no future for cryptocurrency either.

Needless to say we are aware of the diversity of utility tokens, but even cryptocurrency security tokens are not just a substitute of a simple bond (debenture) or stock certificates. In order to have features as a token like a warrant format so that profit claim rights and stock certificate value can segregate and spread, I am expecting the issuance of a abundant variation of tokens, like tokens with special shareholder beneficial receipt functions etc.

About Order Book trading Regulations and Fair price

There are rumors on the interne about Order book trade of cryptocurrency disappearing, but I do not think that anything like this will ever happen.

In the history of securities, more than making the order book into a regulation, we have come to a method of controlling the order book. In the market, what I thought of as fair price can be destroyed in one moment a 100%. If such disastrous declines would occur, we would not wait for the restoration of the fair price, but in general we think that the transaction of that particular market must be stopped. We must not trade in a situation in which nobody has understood what has happened.

The reason for this is that, at the time of the transaction the price is not fixed. In case of the price is highly manipulated due to err information etc., a circuit breaker is been implemented allowing to cool down one’s head and in order to rethink the fair price. In Japan, there is a Securities and Exchange Surveillance Commission, and in every company there is a Trade Management Office. We pull out the unusual orders with everybody, we do something we call “cleaning the order book”.

Even for GOLD and FX, there was a time where the industry representative would bear the obligation of determining fair price. In the world of interest rate markets such as LIBOR and TIBOR also had a generation where the price was thought to be indicated. However, the authority of fair price has now fallen, and the situation has become nothing more than a discrete execution of OTC trading. Even when it comes to cryptocurrency, every exchange is appropriately matching reasonable orders, which I think this is very important.

Some words about “Crypto Assets”

At BTCBOX, we are currently using the term “Cryptocurrency”, but I think for people who have familiarity with financial assets like receivables etc., they are not very particular about terms “currency” or “assets”. That is because whether it be Bitcoin, or security token on Ethereum, they will look at its portfolio based on its validity and nature.

If we look at it from a legal perspective, “Crypto Assets” word itself is , in regard to monetary sovereignty I believe it reflects fixation. By nature, currency is defined as Scale of Value for monetary sovereignty, and it is also a mean for storage of value and transfer of value. On the other hand, cryptocurrency does only have the two functions of storage of value and transfer of value as a currency. At last, this scale means nothing more than a fiat currency such as dollars or yen.In this regard, cryptocurrency comes short of competency when it comes to impersonating currency.

Creation of China’s centralized digital currency

On the other hand, the movement in China was also impressive. The unbalance of its situation was that, with the idea of aiming at becoming a major blockchain country by adopting blockchain as a tool core technology for future development, but at the same time not allowing for expansion of managed currencies by the blockchains. The generation of new blockchain technology in the China’s centralism wells up deep interest within me.

If we assume that in every country, the same ratio of people called “genius” existed, then there would be 10 times more geniuses in China than in Japan, and progressing FinTech technology development with 10 times more manpower, so we are looking forward to the potential benefits with the high expectations. At the same time, I feel like the first adoption of the issued China’s Bank Digital Currency (CBDC) was a very important event that has brought significant changes to the world of cryptocurrency.

Like the way it is called “Cash ad hoc”, cash is highly anonymous, and it cannot be compared to cryptocurrency due to its strong sense of anonymity. However, from a big-data perspective, the immense amount of cryptocurrency information cannot be turned into reality with Fiat currency. This big-data in China has been declared to be controlled by the government. All the information of circumstances of individuals spending money for their livelihood is in the hands of the government.

Can people really accept such management circumstances? Despite this, even in Japan the purchase big-data records of E-commerce services etc. is actually is up for sale.

Now, due to the latest FinTech technology that China is developing, these kinds of philosophical controversies do awake provocation in CBDC. How people will come to accept it, and whether there will be a construction of a new digital economy is very intriguing to me.

The expansion of Regional currencies in Africa

The news about Red Cross issuing “Regional currencies” in Africa left a deep impression on me. In case of giving donation to a developing country, in terms of fund management more than often they are closed-up due to fraud etc. However, in case of adopting blockchain which is a traceable cryptocurrency, the distribution status could be monitored that is the breakthrough point. I wonder what kind of currencies of cryptocurrencies are spreading in a country with underdeveloped Financial instruments?

Just imagining it, I have the feeling that no exchanges or markets exist. With Red Cross as the currency supplier and the repeated cycle of “Issuance and Repayment = Depreciation = Incineration= Token burn” , I think this is the world of guaranteeing utility value. If we can form an economic bloc in Africa’s wide areas, there is a high possibility that a world of monetary value exchange might occur right there. However one might also consider whether a regional economy isn’t a economy activity where only final consumption exists.

The purpose of issuing currency will confirm distribution condition of relief supplies = Monitoring can show whether the relief supplies are reaching to the people who need aid which is interesting. There is no issue of monetary sovereignty here. For example, another currency is serving the purpose of rhinoceros horn trade in order to protect rhinoceros, make legitimate trade, and identify eligible buyers. Thus, with diverse purposes for issuing currency brings a freshness to issues that might not necessarily seek economic rationality.

In Africa, there is a need for currency issuance inherent to Africa, and how that comes straight back here is very important.

Stable Chain backed up with Legal tender Asset

I have payed attention to the stable coins topic issued by the company Tether. The problem is how we think about how to link and manage dollar peg with necessary backing assets. This is related from the root of its design of how to verify the backing assets and create a stable coin with stabilized value.

Firstly, by stabilizing the price, stable coins should have the characteristics of safe usage for settlements. In regard to this point, it depends on how much Tether has put the environment in order. For Tether, doubts for stabilizing the price and issuer improperness might turn into a subject matter. Nevertheless, essentially there has been no situations talking about whether or not Tether can utilize it.

There is the news about some major exchange companies even in Japan that have started to put effort into creating an environment for the usage of cryptocurrency in the market, but it still is nothing more than just a new concept kind of a news.

In contrast, no genuine stable coins have been issued in Japan. I can image there being an environment in America for usage of cryptocurrency in the market like current Japan. However, the long-awaited stable coins are not in a condition to be operating validly. I really wonder how much the environment that can be used in the market will be developed?

If we look at the current state, in order to use cryptocurrency in the market, there is a insufficiency in the mechanism for settlements. If we are not able to connect the settlement network and our wallet in a easier manner, then we won’t have to shout “Can I pay with cryptocurrency?” When this shouting voice expands, I think that more people would raise their voices to the maximum by shouting “We want stable coin”. Until we reach that point, I would like the legal regulations in regard to asset backed up coins to be completed.

What BTCBOX is aiming regarding Cryptocurrency

As major companies continue to enter the market, in order to survive as an exchange it is important to know how provision of cryptocurrency are executed and what kind of features are centered.

Bitcoin is a unique existence that owns ultimate independence.Unlike GOLD, which it often is compared to, the upper limit of issuance, processes, etc. are all engraved in open source programs. The upper limit amount of Bitcoin exceeds the transparency and independence of unknown GOLD, and we would like to continue cherish it as a part of our Company’s identity. From the transparency and independence, its core function that is widely adopted in the economic bloc, is the function of “currency = scale of value, store of value, transport of value ”. I think that,Bitcoin is ought to be existing in the center of the economic bloc as its “currency”.

What we aim at as a business enterprise, is focusing on the practical use and the empirical nature of Bitcoin which has not been used other than as a speculation. The second layer of technology that is to solve the scalability problem in the main chain has been implemented, and multiple sidechains currencies are issued with Bitcoin as their backing asset. In the second layer, by issuing “virtual” Bitcoin, its practical use has greatly improved.

There are other decimal point problems other than scalability. There is the unit of Satoshi with a decimal point of 8, but this is usually not used. With general users being able to use this as a currency, the idea of issuing token on the sidechains has become BTC’s auxiliary currency which is very amusing.

We want play a part in a new network centered on Bitcoin.



Tsuji Harutoshi. Joined The Sanwa Bank in 1979, from 1982 to 1997 he worked as foreign exchange・funds・financial derivative dealer at International Monetary Fund Division, and also experience the Black Monday in 1987. Afterwards, within the Company group he transferred to Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. becoming Senior Manager in Accounting in 2005, and in 2010 he moved to IFRS Executive Director etc. In 2019, he became the President and CEO of BtcBox co.,Ltd.