（Original Video in Japanese was published on the FINOLAB CHANNEL on Sep. 15, 2026 by Makoto Shibata）　https://youtu.be/FgaaJaqEy1g

Japan has been introducing a series of regulatory reforms and new financial mechanisms to expand funding opportunities for startups. The starting point was the government’s Five-Year Startup Development Plan, adopted in November 2022. The strategy aims to fundamentally strengthen Japan’s startup ecosystem through three major pillars: developing entrepreneurial talent and networks, substantially increasing the supply of capital, and promoting open innovation between startups and established corporations. One of its headline objectives is to increase annual investment in startups to around ¥10 trillion within five years.

Since then, reforms have addressed different stages of startup growth and both sides of the investment relationship. Four particularly important areas are stock options, angel investment taxation, equity crowdfunding, and secondary markets for unlisted shares.

Stock options are important for startups because they allow companies with limited cash resources to attract and retain talented employees by sharing the potential upside of future growth. Japan has gradually made its stock-option regime more flexible. For qualifying stock options, taxation can be deferred from the time of exercise until the shares are sold. The exercise period was extended from ten to fifteen years in the FY2023 tax reform. The FY2024 reform further expanded the framework by introducing a system under which issuing companies can manage shares themselves and increasing the maximum annual exercise amount from ¥12 million to as much as ¥36 million. Legal reforms have also introduced a stock-option pool mechanism, giving startups greater flexibility in designing employee incentives.

The angel tax incentive has also been expanded to encourage investment at the pre-seed and seed stages. The system provides tax benefits to individual investors funding startups. Reforms introduced a Japanese version of the U.S. Qualified Small Business Stock concept, allowing preferential treatment when capital gains are reinvested in early-stage startups or used to establish a new business. Subsequent changes broadened eligible investments and extended the period during which capital gains can be reinvested. In FY2024, investments using the angel tax incentive reached approximately ¥18.5 billion, demonstrating the growing role of individual investors in startup financing.

A third area is equity crowdfunding. Japan introduced the framework in 2015, but initially imposed relatively strict limits: an individual could invest only ¥500,000 per company, while fundraising was effectively capped at ¥100 million. The rules have subsequently been relaxed. In 2022, the calculation method was changed so that companies could raise up to ¥100 million through crowdfunding alone. In 2025, the fundraising ceiling was raised to ¥500 million, while the individual investment limit was relaxed to 5% of the investor’s net assets, subject to a maximum of ¥2 million. At the same time, larger offerings remain subject to disclosure and auditing requirements, balancing easier access to capital with investor protection.

Perhaps the most significant structural development is the effort to establish a functioning secondary market for unlisted shares. Historically, Japan’s startup ecosystem has suffered from limited liquidity in private shares. Venture capital funds typically have a life of around ten years and eventually need to exit investments. Without an active secondary market, this has often meant relying on an IPO or M&A transaction. The lack of alternative liquidity has contributed to the problem of “small IPOs,” in which companies may go public before reaching sufficient scale simply to provide an exit opportunity for existing shareholders.

This contrasts with markets such as the United States, where platforms including Nasdaq Private Market, Forge Global, and EquityZen facilitate transactions in private-company shares. The United Kingdom also has markets and investment schemes designed to channel capital toward growing companies. Japan has created mechanisms such as the Japan Securities Dealers Association’s shareholder community framework and TOKYO PRO Market, but these have not generated comparable liquidity.

Regulatory reform is now attempting to change this situation. Traditionally, intermediating stock transactions required registration as a Type I Financial Instruments Business Operator, involving substantial capital and regulatory requirements that created high barriers to entry. An amendment to the Financial Instruments and Exchange Act enacted in 2024 introduced a special framework for intermediating unlisted securities. Requirements for individuals to qualify as professional investors have also been reviewed and clarified. These changes are intended to encourage new intermediaries and improve liquidity in private shares.

A more active secondary market could benefit several participants. Startups could avoid premature IPOs and pursue more flexible capital strategies. Venture capital funds and other existing shareholders could obtain liquidity without forcing portfolio companies to list. Investors would gain access to a broader range of private investment opportunities, while improved secondary-market liquidity could also encourage investment in primary fundraising rounds. For financial institutions, private-market intermediation could develop into a new business area as demand for private equity and alternative investments grows.

Several recent examples illustrate how the market is evolving. eCrowd combines equity crowdfunding with the angel tax incentive and has expanded into investment opportunities for middle- and later-stage companies through “eCrowd NEXT.” Smartround Securities, a subsidiary of Smartround, completed registration in August 2026 for the special unlisted-securities intermediation business, enabling it to develop secondary transactions in private shares. Meanwhile, LUCA Japan has created funds providing Japanese investors with exposure to selected late-stage U.S. private companies.

Another notable development is the combination of private equity with digital securities. In September 2025, SBI Securities, Shinsei Trust & Banking, Tokio Marine Asset Management, and BOOSTRY jointly developed Japan’s first private-equity fund investment product for individual investors using security-token technology. The product aims to broaden access to private-company investments that had traditionally been concentrated among institutional investors.

Overall, Japan’s startup-financing reforms represent more than a collection of deregulation measures. The broader policy direction is shifting from simply “increasing the number of public companies” to “increasing the number of growth companies.” The objective is not to create new markets or financial schemes for their own sake, but to build an ecosystem in which capital can circulate according to the different stages of startup growth. These reforms do not necessarily make fundraising easier, but they significantly expand the options available to entrepreneurs when designing their capital strategies—and, at the same time, broaden the range of opportunities available to investors.

（Original Video in Japanese was published on the FINOLAB CHANNEL on Aug. 11, 2026 by Makoto Shibata）　https://youtu.be/sHzpXM4sHQw

Decentralized Finance, or DeFi, refers to financial services provided through automated programs, primarily smart contracts, on blockchain networks without relying on traditional centralized intermediaries such as banks, securities companies, or crypto-asset exchanges. Compared with conventional centralized finance, or CeFi, DeFi allows users to manage assets directly through their own wallets, interact peer-to-peer or with liquidity pools, and access financial services around the clock, often without conventional account-opening procedures or identity verification.

The underlying technology is blockchain, a distributed database in which transaction data is stored in interconnected blocks. Each block contains information linked cryptographically to the previous block, making unauthorized alteration detectable and allowing participants to verify the integrity of transaction records. This architecture provides the technological foundation for decentralized financial transactions.

DeFi has four important characteristics. First, smart contracts automatically execute transactions when predefined conditions are satisfied, reducing the need for manual intervention by third parties. Second, many DeFi services are permissionless, meaning that users can access them regardless of nationality, credit history, or whether they have a conventional bank account. Third, composability allows open-source DeFi protocols to be combined like building blocks to create new financial products and services. Fourth, DeFi is generally non-custodial, allowing users to retain control of their assets through their own crypto wallets rather than depositing them with a centralized institution.

These characteristics have enabled a wide range of financial services. Decentralized exchanges (DEXs) such as Uniswap allow users to exchange crypto assets directly with other users or liquidity pools. Lending protocols such as Aave enable users to earn interest by supplying assets or to borrow against crypto collateral. Other applications include stablecoins and synthetic assets, as well as yield farming, in which users provide liquidity to protocols in return for transaction fees or reward tokens.

However, the same characteristics that make DeFi innovative also create significant risks. With no centralized administrator, users may have limited protection when funds are mistakenly transferred, fraud occurs, or a protocol fails. Vulnerabilities in smart contracts can be exploited by hackers, resulting in large-scale losses. Moreover, the ability to transact without conventional identity verification and the pseudonymous nature of blockchain transactions can make DeFi attractive for money laundering, terrorist financing, and other forms of financial crime.

Against this background, the Financial Action Task Force (FATF) published a report on the regulatory challenges posed by DeFi in July 2026. The report reflects the rapid expansion of the DeFi ecosystem, including growing participation by institutional investors and virtual asset service providers (VASPs), while highlighting increasing risks related to money laundering, terrorist financing, and proliferation financing. Its objective is to clarify how FATF standards, particularly Recommendation 15, should apply to DeFi arrangements. A key principle is technological neutrality: regulation should focus not on a particular blockchain or smart contract itself, but on the individuals or legal entities that exercise control or sufficient influence over it.

The FATF framework therefore distinguishes among three types of DeFi arrangements according to their governance and control structures. The first is centralized DeFi, where identifiable developers, administrators, governance-token holders, or other parties exercise control. These arrangements are subject to FATF standards and may require licensing or registration. The second category consists of arrangements that are effectively centralized but whose controllers are difficult to identify because of pseudonymity or other factors. These are also considered within the scope of FATF standards, although enforcement can be difficult. The third category is truly decentralized DeFi, where no person exercises control or sufficient influence. Because technology itself cannot be regulated as a legal entity, such arrangements fall outside direct application of the standards, requiring alternative risk-mitigation measures.

This distinction is particularly important because calling a service “decentralized” does not necessarily mean that it is decentralized in practice. FATF therefore identifies both on-chain and off-chain indicators for determining who actually exercises control. On-chain indicators include possession of upgrade keys or backdoors, authority to change fees, interest rates or collateral ratios, control over price oracles, receipt of protocol revenues, and concentration of governance tokens or voting power. Off-chain indicators include control of websites and applications, authority over development roadmaps and infrastructure, management of trademarks and official communications, and employment or financing of developers by a company or foundation.

The need for such scrutiny is reinforced by the financial crimes associated with DeFi. These include fraud and Ponzi-type schemes, sophisticated laundering networks using combinations of cross-chain bridges, DEXs and mixers, hacking linked to proliferation financing, and governance attacks, where mechanisms such as flash loans may be used to temporarily acquire significant voting power and manipulate protocol decisions.

For national authorities, FATF recommends a risk-based approach. Countries should assess their exposure to DeFi risks, impose licensing or registration requirements where identifiable controllers exist, and consider embedding AML/CFT measures at the smart-contract level. Where controllers cannot be identified, authorities may need to rely more heavily on points of contact with the conventional financial system, including VASPs and stablecoin issuers, to conduct customer due diligence or freeze assets. FATF also emphasizes blockchain analytics, public-private partnerships, international cooperation, and mechanisms for rapidly tracing, freezing, and recovering illicit assets.

The report also places responsibilities on businesses. DeFi arrangements with identifiable controllers should comply with FATF Recommendation 15 and implement financial-crime controls. Governance structures, contact information, and the scope of control should be transparent. VASPs and financial institutions interacting with DeFi protocols are also expected to assess DeFi-related risks, conduct appropriate customer identification, and maintain real-time transaction monitoring.

Overall, the FATF report represents an important step toward establishing a more consistent international approach to DeFi regulation. Rather than treating all DeFi activities uniformly, it distinguishes between arrangements where identifiable parties exercise effective control and those that are genuinely decentralized. The emerging regulatory direction is therefore not to regulate decentralization itself, but to identify where actual control exists and apply proportionate, risk-based regulation accordingly. This approach seeks to preserve the innovative potential of DeFi while addressing its growing exposure to money laundering, financial crime, and other risks.

（Original Video in Japanese was published on the FINOLAB CHANNEL on July 28, 2026 by Makoto Shibata）　https://youtu.be/X1FhA6SiuiM

As financial services increasingly move “on-chain,” tokenized deposits are emerging as an important new form of digital money. They aim to combine the trust and stability of conventional bank deposits with the speed, programmability, and flexibility offered by blockchain and distributed ledger technology (DLT). Financial institutions in Japan and overseas are therefore exploring tokenized deposits as part of the next generation of payment and settlement infrastructure.

A tokenized deposit is essentially a digital representation of an existing commercial bank deposit issued on a blockchain or DLT network. It maintains a one-to-one relationship with conventional fiat-denominated deposits, such as yen or U.S. dollar deposits. Because commercial banks remain the issuers, tokenized deposits can operate within existing banking regulations and deposit frameworks while enabling funds to be transferred and settled digitally around the clock.

Tokenized deposits occupy a distinctive position among emerging forms of digital money. Stablecoins are generally issued by private companies and backed by reserve assets, while central bank digital currencies (CBDCs) are direct liabilities of central banks. Tokenized deposits, in contrast, remain liabilities of commercial banks and are legally treated as deposits. In Japan, this means that tokenized deposits fall primarily within the banking regulatory framework, whereas stablecoins are treated as payment instruments under the Payment Services Act. All three forms of digital money can potentially incorporate programmable functions, but their issuers, underlying assets, legal status, and risk structures differ significantly.

One of the most promising applications is Delivery versus Payment (DVP) for securities transactions. Conventional securities settlement involves separate processes for transferring securities and funds, creating time lags and counterparty risk. Although settlement cycles have been shortened internationally—for example, the U.S. securities market moved from T+2 to T+1 in May 2024—the basic challenge remains. By linking tokenized securities and tokenized deposits through smart contracts, the transfer of an asset and its payment could occur simultaneously, enabling atomic settlement. This could eventually facilitate T+0 settlement, reduce counterparty and settlement risks, lower collateral requirements, improve capital efficiency, and enhance market liquidity.

Another major benefit is 24/7 real-time settlement. Conventional interbank payments are still affected by banking hours and business days, while cross-border transactions often involve multiple correspondent banks and may take several business days. Tokenized deposits can be transferred continuously on blockchain networks, potentially enabling immediate settlement at night, on weekends, and on holidays. Such capabilities are becoming increasingly relevant as securities markets themselves consider longer trading hours and financial markets move toward continuous operation.

Tokenized deposits also introduce programmability through smart contracts. In conventional banking, contractual information and payment processing are usually handled through separate systems, requiring manual procedures such as invoice processing, credit checks, payment instructions, and approvals. With tokenized deposits, payment can be automatically triggered when predetermined contractual conditions are satisfied. For example, a payment could be executed immediately when a logistics system confirms that goods have been delivered. In corporate transactions and supply-chain finance, this could improve transparency, reduce administrative workloads, accelerate receivables collection, and make cash-flow management more predictable.

Another advantage is their compatibility with the existing regulatory framework. Because tokenized deposits are issued by regulated banks, they can be designed around established KYC and AML requirements. This may make them easier to integrate into existing banking services than entirely new forms of digital money. At the same time, interoperability will become increasingly important as different banks issue their own tokens. Common protocols and cross-chain technologies will be needed to enable settlement between different tokenized deposits and other tokenized financial assets.

Tokenized deposits could also provide a bridge between traditional banking and Web3 and decentralized finance (DeFi). Stablecoins such as USDT and USDC currently play an important role in DeFi, but concerns have been raised regarding issuer reliability, reserve transparency, and KYC/AML arrangements. Bank-issued tokenized deposits could offer a more regulated form of digital money for permissioned DeFi, where access is restricted to verified participants. This could create new opportunities for institutional lending, collateral management, corporate finance, and B2B payments.

Several initiatives demonstrate how the concept is already moving toward practical implementation. JPM Coin, operated on J.P. Morgan’s Kinexys blockchain platform, is backed one-to-one by bank deposits and is used mainly for large-value corporate payments and liquidity transfers. The platform has processed trillions of dollars in transactions, and experiments are also connecting it with tokenized securities and public blockchain infrastructure.

At the international level, Project Agorá, led by the Bank for International Settlements (BIS) and the Institute of International Finance (IIF), is exploring a next-generation cross-border payment infrastructure based on tokenization. The project brings together seven central banks and more than 40 private financial institutions and examines how tokenized commercial bank deposits and central bank reserves could be integrated using DLT. Its objective is to address longstanding problems in cross-border payments, including slow processing, high costs, and limited transparency.

Japan is also seeing practical initiatives. Hokkoku Bank’s Tochika represents an example of a bank-backed digital currency designed for payments and transactions within Ishikawa Prefecture, with the broader objective of supporting the circulation of funds within the regional economy. Meanwhile, Japan Post Bank is developing a DCJPY-based tokenized deposit and aims to provide settlement services linked to NFTs and security tokens during fiscal 2026.

Overall, tokenized deposits could become an important bridge between the conventional banking system and the emerging on-chain financial economy. They preserve the trust associated with commercial bank deposits while introducing capabilities such as DVP, real-time settlement, smart contracts, and connectivity with digital assets. The key challenge, however, will be integrating this new infrastructure with existing deposit and core banking systems. Ultimately, the pace of adoption may depend not only on blockchain technology itself, but also on how quickly and flexibly banks can transform their existing operational infrastructure.

（Original Video in Japanese was published on the FINOLAB CHANNEL on June. 23, 2026 by Makoto Shibata）　https://youtu.be/vANj5aDSK5c

QR-code payments have become one of the most important innovations in Asia’s digital payment landscape. Although QR codes were originally invented in Japan, their large-scale adoption for consumer payments began in China and has since spread throughout Asia. Today, QR payments are transforming how people make purchases, transfer money, and conduct cross-border transactions.

China played a pioneering role through the rapid growth of Alipay and WeChat Pay. Supported by the widespread adoption of smartphones, these services evolved into “super apps” that integrate payments with messaging, e-commerce, transportation, and many other daily activities. Together they dominate China’s mobile payment market and have expanded their usability across many Asian countries.

Other Asian countries have followed different paths but share a common trend: government-led development of real-time payment infrastructure linked to QR-code technology.

India’s Unified Payments Interface (UPI), introduced in 2016, is one of the most successful examples. UPI enables instant transfers and payments through mobile applications, phone numbers, and QR codes. It has become the dominant payment infrastructure in India and is often cited as one of the world’s largest real-time payment systems.

Singapore introduced PayNow for instant payments and later launched SGQR, a unified QR standard that allows multiple payment providers to be accepted through a single QR code. Similarly, Thailand’s PromptPay, Indonesia’s QRIS, Malaysia’s DuitNow QR, the Philippines’ QR Ph, Vietnam’s VietQR, Cambodia’s KHQR, and Myanmar’s MMQR all represent national efforts to standardize QR payments and ensure interoperability among banks, e-wallets, and payment providers.

Japan presents a unique case. Despite being the birthplace of QR-code technology, the country initially experienced fragmentation, with many competing payment services such as PayPay and others. To address this issue, the Cashless Promotion Council introduced JPQR, a unified QR payment standard. More recently, Japan has begun connecting JPQR with overseas systems, including those of Cambodia and Indonesia, improving convenience for international visitors and businesses.

A major trend highlighted in the presentation is the shift from national standardization to international connectivity. Singapore has taken a leadership role by linking PayNow with Thailand’s PromptPay and subsequently connecting with payment systems in India, Malaysia, and Indonesia. Additional links with other ASEAN countries are under development. Meanwhile, Alipay has established partnerships with more than 50 payment providers across Asia, creating a broad network of interoperable QR payment services.

Another emerging development is the integration of stablecoins into QR payment infrastructures. Pilot projects are exploring how stablecoins can serve as the settlement layer behind QR transactions, enabling 24/7 cross-border payments with lower foreign-exchange and transaction costs. Examples include stablecoin payment trials in Japan and initiatives by regional platforms such as Grab.

In conclusion, QR payments have evolved from a simple payment method into a strategic digital infrastructure for Asia. Governments have promoted common standards and interoperability, while cross-border connections are gradually creating a seamless regional payment network. Looking ahead, the combination of QR payments, real-time settlement systems, and stablecoin technology may further accelerate financial integration across Asia.