Interview: Cryptocurrency and Prosocial System
By : Kie Tsukamoto
Beyond business fields and nationality, Asian Market Entry interviews interesting entrepreneurs found in Japan and features them in our blog post. For our first post, we interviewed Ryoichi Abe, CEO/Founder of PEACE COIN OÜ (also check his seminar with us in Feb, 2018). PEACE COIN is a crypto startup that was incorporated in Estonia, and run by Japanese board members. We asked about his vision and key points needed to succeed in the Japanese market.
How did you get here?
Kie: You established a company in Estonia using an e-residency; but what motivated you to startup in the first place?
Roichi: If I wanted to truly realize my vision, I felt that I needed to go on my own. But, it was only 1.5 years ago (Jan, 2017) when I seriously started thinking about establishing PEACE COIN. But, I do not really feel that I “started-up” because with my previous job, I was always responsible for new business development, where I did literally everything: from raising funds to operating the business. My previous company is headquartered in Singapore and there are group companies in Hong Kong, Malaysia, Myanmar and other parts of Asia. We ran a variety of businesses based in these locations. Although our main business was always financial consulting, we ran travel, restaurant and even preschool businesses. Those new businesses are the ones that I planned and operated. For these new businesses, I incorporated companies in different countries and bought out local businesses to scale it. The experience I got working on these businesses helped me when I became an entrepreneur and created PEACE COIN. This is definitely my backbone.
Kie: So, what pushed you to form your own startup?
Ryoichi: I cannot stand unfairness, and I wanted to do something about it. I do not want to be bypassed. Perhaps, my strong feelings come from my upbringing and how I grew up. My sister is intellectually disabled, since birth; and because of this, with her I have encountered and experienced a lot of unfair treatment, from bullying at school to discrimination in the social system, that was directed toward my sister. This experience definitely shaped who I am today. Ever since I was young, one thing was always on my mind, that is: I must take care of her. That is why I got into the financial business because it is a well-paying job. My motivation was to look for a job that can support two people, i.e. my sister and I. But, as we all know, business, especially the world of finance, is not always a fair game. The more I worked, the more I had to physically feel the unfair social system that exists in this world. “Am I doing the right thing?” “Is this what I want?” Those questions never went away.
Kie: That mindset led you to build PEACE COIN?
Ryoichi: Yes. The current capitalist system goes quite well with rationalism. But, being rational is not the core part of humanity. I wanted to create a system that can work more in harmony with the human side of us—bringing up more of a prosocial side of humanity and to incentivize such behavior, so that it can be reciprocated. That is the system I wanted to develop, and I realized that financial knowledge and blockchain technology combined with help from social psychology can realize my vision. That is how PEACE COIN is developed.
What is PEACE COIN?
Kie: So, tell me about PEACE COIN. What is it, really?
Ryoichi: PEACE COIN is money that circulates by thanks. What is unique about these coins is the depreciation and appreciation system that I invented: the more you use the coins, the more coins you gain; and the more you save, the more coins you lose. So, if you use the coins, you are rewarded, and conversely, you are penalized for not spending (For more information, read PEACE COIN).
What I wanted to create using this system is what I call ARIGATO CREATION: the money is circulating through appreciation. For instance, work such as volunteering and house chores are unpaid labour, despite their prosocial impact. With our coins, such unpaid work will be rewarded and those who use the coins to appreciate the work will also be rewarded in our system—gaining more coins. With this system, it can motivate prosocial behavior and its reciprocity in a community. I wanted to introduce the ARIGATO CREATION on a community basis and expand it gradually.
Kie: Are there any case studies of PEACE COIN?
Ryoichi: The latest case is that of Inage-ku (Chiba-city, Japan); they decided to implement PEACE COIN as their local coins. We are discussing similar projects with other cities in Japan, such as Hokkaido, Nagano and Kanagawa. There are also corporations that are interested in implementing our coins as their colored coins.
Business Obstacles Faced in Japan
Kie: How come you incorporated a company in Estonia, not Japan?
Ryoichi: Regarding cryptocurrency, Japan is still being cautious from a regulatory view point. Thus, I was a bit hesitant to create a crypto startup in a country where their stance was not predictable. At first, I was looking at Switzerland, Singapore, Estonia, Iraq and Hong Kong as potential locations for incorporations. When talking about cryptocurrency, Switzerland is one of the leading countries; however, incorporating a company there as a non-resident is quite costly and hard. It requires you to hire local personnel and lawyers etc. When picking a location, the criteria I was looking at are: lenient on share-holding as a non-resident, a great HR pool of great engineers, an incorporation process, ICO friendly regulations and the list goes on… And, I consequently decided on Estonia. Yet, obviously our main business operations are taking place in Japan, as we live here.
Kie: What issue(s) did you face when starting the business in Japan?
Ryoichi: Conducing the ICO is the number one thing. Usually, crypto startups raise money through ICO; however, doing an ICO is not really possible here in Japan. Legally speaking, it says you are able to do it if you are registered as a Virtual Currency Exchanges Business. Yet, this registration is virtually impossible besides it costs a lot. Nonetheless, it seems like things are changing a bit. There are more corporate funds such as “gumi” that are investing in startups through tokens. Thus, raising money itself seems to be getting easier here in Japan, though ICO is still extremely hard and this is like a local rule. You really need a local expert to see what options there are and what to do to keep going with your ICO/Business plan.
Key Points to Succeed in Japan
Kie: What do you think are the most important points that international companies should take notes on when entering and operating business in the Japanese market?
Ryoichi: Firstly, they should understand that there are local rules, and obviously they are not written down for you to read. ICO is a good example case of this. There is no legal documentation that says “you cannot conduct ICO,” but in reality, it is virtually impossible. Secondly, finding and bringing a local expert/professional into your team is crucial if you want to succeed here. Japan is geographically isolated and has its own language; this characteristic kind of drives this market to develop their own trends, unique rules and “normality.” For instance, you may think “App screens should look like this. It is normal.” It is not so surprising that this “normal” is not normal here. You really should not underestimate the cultural differences, so you should have someone local and expert in your field. Lastly, it is a bit of an overlapping point but being culturally sensitive is important. When conducting international business, communication with local people is unavoidable. A gap or dissonance caused by cultural differences is something you should avoid. This is why developing a local team that can solve those issues is critical for smooth business.
What Startups Can Survive in Japan?
Kie: What type of businesses will be desired here in Japan?
Ryoichi: Broadly categorized, I think there will be just two types: 1. Human-based business and 2. Automation and efficiency based business. I feel that society is polarizing: one side is about super cost effective/convenient services like Amazon.com and Costco; and the other side is about services/products that are generated by people, something only humans can do or appreciate the human touch. So, broadly speaking, I feel that regardless of fields, businesses will be categorized by either one of these types.
Message from Asian Market Entry
Asian Market Entry offers international startups a comprehensive service for successful Japanese market entry. One of the major obstacles faced by international businesses is local recruitment. Through our more than a decade of business consulting service, we have developed one of the best professional human resource databases; and we can offer the most suited local professional based on your business plan and needs. We can match you with a local professional with great networks and know-ho to lead and scale your business in Japan. For more information, please contact us.
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