During a recent talk at the Japan Society in New York, the CEO of the Monex Group made comparisons between the derivative market in the early 1980s and the current state of cryptocurrency. He implied that the crypto world will experience similar growing pains and market sentiment similar to that seen with the derivative market in its infancy.
After making a move which some regard as a complete about-face from prior practices, the Monex Group decided to acquire Coincheck, a recently hacked cryptocurrency exchange based in Japan, for a reported $34 million USD.
Oki Matsumoto, the current CEO of the Monex Group and the person believed to be at the forefront of this seemingly drastic business shift, stated:
What’s happening in the crypto world today is very similar to derivatives in the 1980s, and sooner or later all of those regulatory frameworks will be fixed.
History Repeating Itself?
For those who are unaware, back in the 1980s, derivatives were an innovative yet controversial financial tool that faced significant negative sentiment on the part of regulators at the time. Despite the regulatory pushback, this subsector began to gain a large amount of traction, with many financial institutions jumping on the bandwagon to catch this new wave of financial innovation.
For those who would dismiss Matsumoto’s statement as wishful thinking, it is worth noting that he is a Wall Street veteran, having started his career working with derivatives at Solomon Brothers. He later moved on to Goldman Sachs, where he worked for 12 years. Since his time on Wall Street, Matsumoto moved back to Japan where he became one of the founding members of the Monex Group in 1999 and has served as CEO since 2004.
Monex has just completed the final steps required for Coincheck to become legally acquired by the financial services firm. Monex’s shares have exploded in value in direct correlation with the acquisition of the cryptocurrency exchange.
Of the purchase of the cryptocurrency exchange, Matsumoto stated:
We work beautifully together, they (Coincheck) can provide a lot of value.
Coincheck is set to regain its place in the Japanese market with the help of Monex’s resources and manpower as it recovers from a crippling $534 million USD hack.
With Coincheck in the fold, Monex is poised to make meaningful impacts on the cryptocurrency space in Japan. Monex Group, an undoubtedly influential company in the Japanese economic sector, should begin to involve more retail investors with the crypto space as time moves on.
Matsumoto added to his previous statements, implying he has high hopes for the industry as the market begins to move into the next phase of adoption and innovation. He expresses this positive vision by saying:
Only a few people could understand derivatives, just the rocket scientists and those people, but five years later, all the biggest schools in the world were teaching derivatives.
However, Matsumoto understands that it may take time and a paradigm shift to make this happen. As it stands, taxes on cryptocurrency can add up to almost 55% for some Japanese investors, a daunting number to say the least.
Despite this, A survey conducted by R25 has found that approximately 14% of Japanese males, ranging from the ages of 25 to 30, own cryptocurrencies.
I think it’s going to take time for Japanese retail people to move a good portion of money into crypto.
The future may seem unclear for the cryptocurrency space as regulators juggle with this rising sector and as traditional companies begin to adjust to blockchain technologies. However, it is clear to see that Japan still remains as one of the main players in the ever-growing cryptocurrency market with companies such as Monex leading the way to a higher level of market impact.
Do you agree with the statements that the Monex CEO was making? Do they seem logical or possible in your perspective? Let us know in the comments below.
Images courtesy of Coincheck, Pixabay, and Bitcoinist archives.