Fireblocks CEO: Japan provides a conducive environment for building, testing, and launching new products across the entire ecosystem

Michael Shaulov, the CEO of Fireblocks, delivered a keynote address in Tokyo on April 9, 2024, discussing the potential of blockchain technology and digital assets to create utility in financial infrastructure and internet ownership. Here are the key points from his talk:

1. Blockchain technology has finally gained a line of sight into the use cases that will take it mainstream, beyond the investment thesis of Bitcoin.
2. Shaulov believes that the innovation that happened in the last crypto cycle, although accompanied by busts, is not lost in vain and will underpin the most exciting use cases moving forward.
3. He outlined two preliminary requirements for successful crypto use cases: (I) the technology must be at least 10 times better than its closest substitutes in some important dimensions (aka as the “10x improvement” concept by Peter Thiel); and (II) there must be a path to regulatory acceptance, where regulators are comfortable drafting innovative regulations for better systems.
4. Shaulov identified Japan as a conducive environment for building, testing, and launching new products across the entire ecosystem, from large enterprises to startups.
5. Stablecoins as internet-native commercial and government money, used as tokenized deposits and CBDCs, are a 10x utility use case: (I) stablecoin payments are 10x more powerful than traditional banking rails, especially for large institutional transactions; (II) Japanese banks like MUFJ Trust, Minna Bank, and Resona Bank are exploring stablecoin issuance for cross-border or local payments; (III) global regulators are recognizing the power of internet-native money and laying out infrastructure for its adoption; (IV) stablecoins can solve pain points like transparency, speed, and cost in cross-border transfers and settlements, as proven by companies like WorldPay; and (V) stablecoins enable merchants to generate yield on funds that would otherwise be idle during weekends or settlement periods.
6. Tokenization of real-world assets like money market funds (e.g., BlackRock’s tokenized money market fund) and government bonds (e.g., the Tel Aviv Stock Exchange and German securities registration pilots) are other 10x utility cases.
7. Decentralized and cryptographic capabilities of blockchain can remove counterparty risks and create a more transparent, secure, and risk-free market structure, as seen during the FTX collapse when users moved funds to self-custody solutions like Fireblocks.
8. Fireblocks is innovating in this area with technologies like multi-party computation, smart contracts, and DeFi primitives, offering solutions like: (I) anon-custodial wallet SDK for transparent and web3-focused customer experiences; (II) custody technology for institutional trading without centralized clearing houses; and (III) smart transfer capabilities supporting delivery vs. payment through atomic swaps.

In summary, Shaulov highlighted the potential of blockchain technology and digital assets to revolutionize financial infrastructure and internet ownership by providing 10x improvements over existing systems, emphasizing the importance of regulatory acceptance and Japan’s conducive environment for innovation in this space.

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