Japan FinTech Observer #127

Welcome to the one hundred twenty-seventh edition of the Japan FinTech Observer.

Congratulations to the WebX & Coinpost teams for delivering an outstanding conference!

Although SBI took the headlines with a full plate of announcements already on the Friday prior in Osaka, the news flow did not let up. More stablecoin and/or deposit token announcements, a zero trading cost Bitcoin accumulation plan, and XRP as a treasury asset are only some of the highlights.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Norinchukin Capital and GMO VenturePartners participate in Tazapay's Series B; Vlightup raises seed round funding from Gazelle Capital; Global Brain Corporation has invested in Japan M&A Incubation; Mitsui Sumitomo Insurance Capital Leads Visual Bank's JPY 1.1bn Series B; GMO VenturePartners Participate in TransBnk's USD 25m Series B; DNX Ventures raises JPY 24.7bn for 4th Japan Annex Fund to invest in existing portfolio companies;
• Insurance: partial revision of the "Comprehensive Guidelines for Supervision of Insurance Companies"; FWD Group's Japan Business; Shift provides Tokio Marine & Nichido Fire Insurance with new Generative AI capabilities for fraud detection
• Banking: Minna Bank and Merpay sign business partnership agreement for BaaS business; MUFG completes stock transfer of Moneytree; Trust and MUFJ Trust & Banking partner for system development productivity through GenAI
• Payments: SMBC, Densan System and Ava Labs to create new stablecoin payment and management services; Japan Post Bank is considering commencing the handling of tokenized deposits by fiscal year 2026
• Capital Markets: Webull Securities begins offering Japanese Stock Trading API
• Digital Assets: WebX conference reports from Merida Pan at Magic Circle and by Kenji Mitsusada at Secured Finance AG; Next Finance Tech joins the Canton Network as validator; SBI Group and Chainlink have announced a strategic partnership; BITPOINT launches completely zero-cost Bitcoin dollar-cost averaging investment; gumi to Purchase JPY 2.5bn of XRP; SyFu, a DePIN project that utilizes payment data, has published its "Whitepaper 2.0"
• The Last Word: Japan’s Economic Outlook for Fiscal Years 2025-2026

The Financial Services Agency's Strategic Priorities

The Financial Services Agency has published its "Strategic Priorities" for the period from July 2025 to June 2026.

Contributing to Sustainable Growth through Enhancing Financial Functions

• Develop a “Regional Financial Power Enhancement Plan” by the end of 2025
• Further advance the initiative for “Promoting Japan as a Leading Asset Management Center” and enhance companies’ corporate value
• Responding to the digitalization of financial service

Ensuring Trust in a Stable, Fair and Secure Financial System

• Ensure the stability of the financial system
• Promote confidence in the fairness and security of FIs and financial markets

Continuously Evolving as a Financial Regulator that Serves the Public

• Aim to reorganize the Supervision Bureau into a two-bureau structure to promote the sound development of businesses, foster innovation, and further enhance the sophistication of its supervision
• Improve the organization of FSA and enhance our staff members’ capabilities

Venture Capital & Private Markets

• Norinchukin Capital and GMO VenturePartners participate in Tazapay's Series B: Tazapay, a leading global cross-border payments infrastructure platform, has successfully closed its Series B funding round with investment from Peak XV Partners, Ripple, Circle Ventures, Norinchukin Capital, and GMO VenturePartners; existing investor Peak XV Partners led the round and 2 other existing investors January Capital and ARC180 joined the round
• Vlightup raises seed round funding from Gazelle Capital: Vlightup's mission is to redefine the meaning of "trust" in the Web3 society and provide a transparent and fair economic infrastructure using blockchain technology; the service, "TRUSTAUTHY," is the world's first cryptocurrency security platform, born in Japan, that combines geographic authentication (GeoAuth) using global positioning satellites (GNSS) with multi-party distributed signatures (GeoMPC); this technology physically prevents unauthorized access and data leakage in cryptocurrency transactions, which face increasing security risk
• Global Brain Corporation has invested in Japan M&A Incubation (JMAI), a company that supports the realization of inorganic corporate growth driven by M&A, through its Global Brain Flagship Fund IX as the lead investor
• Mitsui Sumitomo Insurance Capital Leads Visual Bank's JPY 1.1bn Series B: Visual Bank has raised 1.1 billion yen in equity financing through its Series B round; the round was led by Mitsui Sumitomo Insurance Capital, with participation from CDIB Cross Border Innovation Fund, Incubate Fund, Aozora Corporate Investment, SMBC Venture Capital, W fund, and others; with this new round of funding, Visual Bank is preparing to take the next step in its journey: strengthening its role as a hub where new value is created and real challenges are solved at the intersection of IP and AI; in doing so, Visual Bank aims to contribute to the growth and global competitiveness of Japan’s Creative industry
• GMO VenturePartners Participate in TransBnk's USD 25m Series B: TransBnk has raised $25 million in its Series B funding round led by Bessemer Venture Partners, with participation from Arkam Ventures, Fundamentum Partnership, 8i Ventures, Accion Venture Lab, and GMO Venture Partners; the company’s progress has been underscored by strong adoption; since launch, TransBnk has integrated with over 40 leading banks, including private, public, multinational, and small finance institutions, and now serves more than 220 clients accessing nearly 1,500 APIs every month; its infrastructure underpins mission-critical use cases across lending, wealth-tech, and cross-border payments, making it a trusted partner in advancing India’s digital financial landscape
• DNX Ventures raises JPY 24.7bn for 4th Japan Annex Fund to invest in existing portfolio companies: Tokyo and Silicon Valley-based venture capital firm DNX Ventures has completed the formation of the "4th Japan Annex Fund" with DNX as the general partner, totaling 24.7 billion yen; this fund is a dedicated fund aimed at making follow-on investments in existing portfolio companies of DNX Ventures' main funds (2nd Fund, 3rd Fund, 4th Japan Fund); DNX Ventures has already executed investments from this fund into some portfolio companies of existing funds, including the Series D round of Kakehashi, which raised approximately 14 billion yen including new investors such as overseas institutional investors
• The Financial Services Agency has published the English version of "FSA Analytical Notes (2025.6) vol.1 - Loans Extended to Newly-founded Companies"

Insurance

• Partial Revision of the "Comprehensive Guidelines for Supervision of Insurance Companies": The Financial Services Agency published a partial revision (draft) of the "Comprehensive Supervision Guidelines for Insurance Companies" and other documents from Monday, May 12, 2025 to Friday, June 13, 2025, and widely solicited comments; in response, the Agency received a total of 468 comments related to the partial revision (draft) from approximately 170 individuals and organizations; in light of the cases of fraudulent insurance claims and premium manipulation, the revisions represent a significant strengthening of regulations, primarily focused on preventing inappropriate influence by insurance companies over their sales agencies, ensuring fair competition, and protecting customers' interests; these changes went into effect on August 28, 2025
• FWD Group's Japan Business: the FWD Group has published its interim results report for the six months ended June 30, 2025, its first since going public on the Hong Kong Exchange in July 2025, allowing for a look at its Japanese business; FWD entered the Japanese market in 2017 through the acquisition of AIG Fuji Life, which was rebranded as FWD Life Japan; the business has a well-established market leadership in protection products; since 2022, FWD Japan has been pivoting away from corporate-owned life insurance (COLI) towards individual protection products
• Shift provides Tokio Marine & Nichido Fire Insurance with new Generative AI capabilities for fraud detection: Shift Technology, a provider of AI-driven decision automation and optimization solutions for the global insurance industry, has recently delivered generative artificial intelligence (Gen AI) capabilities as part of their Shift Claims Fraud Detection and Shift Claims Intake deployments for Tokio Marine & Nichido Fire Insurance; Shift’s Gen AI-powered visual intelligence capability uses Gen AI to improve the accuracy of image and document analysis, enabling precise identification of key information extracted from both structured and unstructured data; the use of visual intelligence contributes to the efficiency of insurance claims processing and further supports Tokio Marine’s initiatives to prevent fraudulent claims and streamline the claims process

Banking

• Minna Bank and Merpay sign business partnership agreement for BaaS business: Minna Bank has signed a business partnership agreement with Merpay to utilize Minna Bank's financial functions and services in the flea market app "Mercari"; by combining the strengths of both companies, the firms have reached an agreement that allows them to provide Merpay customers with unprecedented, highly convenient financial services and realize a new form of BaaS, leading to the signing of this business partnership agreement; the companies are preparing for a service release this winter and also plan to establish a Minna Bank "Partner Branch"
• MUFG completes stock transfer of Moneytree: Mitsubishi UFJ Financial Group, its consolidated subsidiary MUFG Bank, WealthNavi, a consolidated subsidiary of MUFG Bank, and shareholders of Moneytree have entered into a stock transfer agreement dated July 31, 2025, and as of August 29, 2025, MUFG Bank has acquired the issued shares of Moneytree; as a result, Moneytree will become a consolidated subsidiary of MUFG Bank; following this stock acquisition, WealthNavi plans to acquire some Moneytree shares from MUFG Bank; Moneytree will be integrated with MUFG's planned digital bank launching in H2 2026
• Trust and MUFJ Trust & Banking partner for system development productivity through GenAI: Mitsubishi UFJ Trust & Banking, Mitsubishi UFJ Trust Systems, and Trust have concluded a business partnership agreement aimed at improving system development productivity through the utilization of generative AI; Trust was founded in 2023 and is a startup that provides services to streamline system development using generative AI; according to the company, this is the first time that a major financial institution and a startup have partnered in the field of system development using generative AI
• Annual or integrated reports from Mizuho, MUFG, and SMBC Group

Payments

• SMBC, Densan System and Ava Labs to create new stablecoin payment and management services: they will study approaches to the sound distribution and utilization of stablecoins, while aiming to improve the efficiency of existing financial functions leveraging blockchain characteristics and create new payment, distribution, and management services; specifically, the partners will explore various use cases from issuance to distribution, payment, and management in financial institution domains and BtoC/BtoB domains, advancing requirement definitions; rather than stopping at one-off proof-of-concept experiments, they will jointly study the materialization of use cases with a view toward continuous business utilization and commercialization
• Japan Post Bank is considering commencing the handling of tokenized deposits by fiscal year 2026, utilizing the platform provided by DeCurret DCP; under the "Co-creation Platform" concept advocated by the Japan Post Group, Japan Post Bank is considering the handling of tokenized deposits for individuals and corporations with the aim of providing new value to customers; the tokenized deposits under consideration are expected to utilize blockchain technology, combining immediacy and transparency in payments; with Japan Post Bank as the issuer, these deposits will serve as settlement deposits of Japan Post Bank, enabling the provision of settlement functions and being covered by deposit insurance, ensuring safe and secure usage; initially, Japan Post Bank is considering the commencement of payment services linked to NFT and security token transactions by fiscal year 2026
• The Bank of Japan Institute for Monetary & Economic Studies has published "A Technical Examination of Non-Ledger-Based Payment Systems": this paper explores a payment system that enables transactions without relying on a ledger or intermediary service providers, examining it from a technical perspective

Capital Markets

• 20-year JGB futures, a missing link in Japan's rate derivatives, have reached a great milestone since trading was reactivated in July, with open interest surpassing 10,000 lots on August 25th, the highest level ever recorded since 1989
• Webull Securities begins offering Japanese Stock Trading API: Webull Securities, the Japanese division of US-based Webull Corporation (NASDAQ: BULL), began offering its Japanese stock trading API on August 27, 2025; this addition to the existing US stock trading API (Webull OpenAPI) enables API-based trading functionality for Japanese stocks, making Webull the first major domestic online securities firm to provide a trading API environment supporting both Japanese and US stocks
• The Ministry of Finance - Japan has published its "JGB Newsletter August 2025," reporting on several events relevant to JGB investors
• Early adopters wanted for a startup in our Tokyo FinTech community: Palance is a multi-asset portfolio analytics platform designed to help investors make smarter, more confident decisions; with Palance, you can connect directly through its broker integration, so all your holdings are in one place; from there, you will be able to track exposures, analyze risk, and surface insights across equities, crypto, ETFs, Funds, and more – all in a clean, unified experience (that's the plan)

Digital Assets

• WebX conference reports from Merida Pan at Magic Circle and by Kenji Mitsusada at Secured Finance AG
• Next Finance Tech joins the Canton Network as validator: Next Finance Tech has joined the Canton Network, a privacy-friendly open blockchain network governed by over 40 of the world's leading financial institutions and service providers, as a validator (node operator) from August 2025; currently, there are over 400 ecosystem participants in Canton; in the future, as a member of the Coincheck Group and Monex Group, Next Finance Tech is also considering the possibility of collaborating with various initiatives within the group through this participation
• SBI Group and Chainlink have announced a strategic partnership focused on accelerating blockchain and digital asset adoption across global markets; Japan's sophisticated financial market and rapidly evolving digital asset ecosystem provide an ideal environment to launch and validate initial use cases; this strategic collaboration combines SBI's deep market expertise with Chainlink's secure and reliable infrastructure for data and interoperability, used by leading financial institutions and DeFi applications worldwide; the SBI team and Chainlink have already proven seamless collaboration in the past: Chainlink, UBS Asset Management, and SBI Digital Markets (an SBI subsidiary in Singapore) previously completed an initiative for automated fund administration and transfer agency using smart contracts under the Monetary Authority of Singapore's (MAS) Project Guardian
• BITPOINT Launches Completely Zero-Cost Bitcoin Dollar-Cost Averaging Investment: BitPoint Japan, which operates a cryptocurrency exchange business within the SBI Group, will launch Japan's first Bitcoin dollar-cost averaging investment service called "Zero Tsumitate" that completely eliminates costs (spreads and fees) associated with dollar-cost averaging purchases
• gumi to Purchase JPY 2.5bn of XRP: gumi has resolved, at the Board of Directors meeting held on August 28, 2025, to purchase 2.5 billion yen worth of crypto assets (XRP); the purchase(s) will be carried out between September 2025 and February 2026; gumi will conduct a quarterly mark-to-market valuation of its held crypto assets, and will record the resulting profits and losses in its income statement; gumi is further enhancing the financial sector within its blockchain-related business, which serves as a core driver of gumi's growth; as part of these efforts, in the first half of fiscal year 2025, gumi acquired the equivalent of 1 billion yen in Bitcoin using its own funds, and having positioned its crypto assets as a strategic asset, has now decided to acquire XRP
• Heritage brands, automotive pioneers, fintech innovators, and one of Japan’s top megabanks are leveraging Avalanche’s technology to power their blockchain future
• "SyFu" is a DePIN project that utilizes payment data and is a Web3 lifestyle app that converts payment data into digital assets; users can earn NFTs and tokens while enjoying everyday payments and consumption activities like a game; the payment data accumulated through this system functions as a universal credential that proves an individual's consumption history and forms DePIN; it is currently operating in test beta on the testnet, and plans to release an open beta on the mainnet in the near future

The Last Word: Japan’s Economic Outlook for Fiscal Years 2025-2026

The NLI Research Institute has updated its "Japan’s Economic Outlook for Fiscal Years 2025-2026", with the key points highlighted being the following:

Real GDP in the April–June quarter of 2025 grew by 0.3% from the previous quarter (1.0% on an annualized basis), marking the fifth consecutive quarter of positive growth. While domestic demand decreased by 0.1% from the previous quarter, exports increased by 2.0% despite the Trump tariffs. This resulted in external demand contributing 0.3% on a quarter-to-quarter basis, offsetting the sluggishness in domestic demand.

The impact of tariff hikes will become apparent in the July–September quarter, leading to a decline in exports. In addition, private residential investment is expected to sharply decline due to a reactionary decline following last-minute demand ahead of the amendments to the Energy Conservation Act for Buildings and the Building Standards Act. Consequently, real GDP isprojected to contract by 1.3% on an annualized basis from the previous quarter, marking the first negative growth in six quarters. In the October–December quarter, real GDP is expected to return to modest positive growth at 0.3% on an annualized basis from the previous quarter as the pace of export decline moderates. However, the risk of continued negative growth will increase if tariffsare further raised.

The real GDP growth rate is projected at 0.6% for FY 2025 and 0.9% for FY 2026. After entering 2026, the negative impact of tariff hikes will gradually fade, exports will recover, and domestic demand will increase, led by private consumption and capital investment. As a result, growth of around 1% on an annualized basis is expected to continue, slightly above the potential growthrate.

The consumer price inflation rate (excluding fresh food) is forecast at 2.7% for FY 2025 and 1.6% for FY 2026. While strong wage increases are expected to accelerate the pace of service price hikes, the appreciation of the yen and lower crude oil prices will lead to a decline in import prices, thus slowing the pace of goods price inflation. Consequently, after entering 2026, the inflation rate is projected to fall below the Bank of Japan’s 2% price stability target.

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