Japan FinTech Observer #145

Happy New Year! Welcome to the one hundred forty-fifth edition of the Japan FinTech Observer.

Japan's Minister of Finance, Satsuki Katayama, rang the bell at the Tokyo Stock Exchange to open the new trading year today.

We are pleased to announce the "Product of the Year 2025": the 50-year mortgage! In the face of sky-rocketing real estate prices, where even second-hand apartments in Tokyo change hands at over 100 million yen, and a third consecutive year of declining real wages, spreading out their debt across 20 more years is the only way many can achieve their dream of home ownership today.

In other news, the November 2025 labor market data has been published, and the total work force has exceeded 70 million people for the first time. Within the labor pool, there also has been a significant increase in permanent employment, in particular for female workers. Some argue that the increase in the work force is attributable to an expanding economy that draws in more people from the sidelines. Alternatively, or rather additionally, the affordability crisis might force many households to generate two incomes.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Digital Securities raises JPY 300m in Series A third close
• Insurance: Sompo Holdings and Nippon Life integrated & responsible investment reports
• Payments: NETSTARS will begin a pilot program accepting Circle's U.S. dollar-pegged stablecoin; DeCurret DCP has entered into a strategic partnership with Kyushu Financial Group for tokenized deposits
• Capital Markets: we have charted the most important publicly listed FinTech companies; Japan's yen swaps go global
• Asset Management: the FSA has published the results of its second Fund Monitoring Survey
• Digital Assets: a look at Coincheck's first year after its Nasdaq listing; SBI publishes the results of its "Next Generation Finance Questionnaire 2025", providing insightful data on digital asset investment habits in Japan
• The Last Word: Expanding labor market despite decreasing population

Venture Capital & Private Markets

• Digital Securities raises JPY 300m in Series A third close: Digital Securities has successfully completed the third closing of its Series A funding round, raising a total of 300 million yen; this latest injection of capital brings the Tokyo-based FinTech firm’s total cumulative fundraising to 1.5 billion yen since its establishment; the round was backed by a strategic mix of institutional and corporate investors, including: Japan Post Capital, Norinchukin Capital, and HoriPro Group Holdings

Insurance

• Sompo Holdings has published its "Integrated Annual Report 2025"
• Nippon Life has published its "Responsible Investment Report 2025"

Payments

• NETSTARS will begin a pilot program accepting Circle's U.S. dollar-pegged stablecoin: "USDC" for payments at physical retail locations within Haneda Airport Terminal 3; the initiative, claimed by the company to be a first for brick-and-mortar stores in Japan, aims to streamline transactions for international tourists and bridge the gap between Web3 assets and real-world retail infrastructure
• DeCurret DCP has entered into a strategic partnership with Kyushu Financial Group and its banking subsidiaries—The Higo Bank and The Kagoshima Bank—to explore the implementation of tokenized deposits using the "DCJPY" digital currency network; this collaboration marks the first initiative of its kind by a regional financial institution within the Kyushu region

Please join our weekly online forum, which we aim to host every Tuesday at 9pm JST, schedule permitting. Supported by our friends at Alpaca and ITFOR, we will also go offline and in-person again. Please check out our schedule on Luma.

Capital Markets

• 2025 Chartbook - The Japanese FinTech Sector on the Tokyo Stock Exchange: the FinTech market as a whole, as captured by the Global X Japan FinTech ETF (Ticker: 2836), ended the year on a positive note, up approximately 18%, and showing resilience during the April 2025 tariff sell-off; we have catalogued the most important entities listed on the Tokyo Stock Exchange that define the modern Japanese FinTech sector by synthesizing data from index constituents, corporate disclosures, and market movements to offer a granular view of the ecosystem as of the end of the 2025 calendar year
• Japan’s yen swaps go global: with US investors now able to trade and clear JPY interest rate swaps (IRS) at the Japan Securities Clearing Corporation (JSCC), cross-border access, clearing competition and yen-rate volatility are converging to reshape one of the world’s most important rates markets

Asset Management

• The FSA's second "Fund Monitoring Survey": the Financial Services Agency (FSA) conducts the Fund Monitoring Survey in light of requests from the International Organization of Securities Commissions (IOSCO) and others for national authorities to collect data on funds of a certain scale from the perspective of financial stability, as well as for the Agency's own monitoring purposes; the FSA has now compiled the summary of results for the second survey and published them

Digital Assets

• Coincheck 2025 - The Tale of Two Tapes: The calendar year 2025 represented a definitive inflection point in the corporate history of Coincheck Group N.V. (Nasdaq: CNCK); transitioning from a privately held subsidiary of the Japanese financial conglomerate Monex Group to a standalone entity listed on the Nasdaq Global Market, Coincheck navigated a year defined by extreme volatility, aggressive strategic expansion, and the rigorous demands of public market scrutiny; we offer an exhaustive analysis of the company's performance, dissecting the interplay between its operational achievements—such as record revenue growth and pivotal acquisitions—and its turbulent capital markets journey, where the stock price faced significant headwinds amidst a complex macroeconomic backdrop
• Digital asset investment landscape: the "Next Generation Finance Questionnaire 2025," a comprehensive survey conducted by the SBI Financial and Economic Research Institute, offers a detailed snapshot of investor attitudes and actions in the digital asset investment landscape in Japa

The Last Word: Expanding Labor Market Despite Decreasing Population

Japan is facing a severe labor shortage, at least if you believe the headlines. The same headlines that were proclaiming the "2024 Trucker Crisis" due to annual overtime being capped at 960 hours (!), and even before that, announced the "2025 Digital Cliff". Alas, armageddon is not yet upon us.

Take the logistics crises as an example. Suddenly, it became possible to combine loads, not only within the same company, but also across competitors. New businesses were born to co-ordinate and consolidate. A drop in service level? Not as far as I can tell.

This is another way of saying that worker productivity in Japan, in particular in the service sector, is appallingly low. GDP per capita (both in PPP terms and current dollars) has been eclipsed by Taiwan and Korea, for example. So for the "virtuous wage/price spiral" to extend beyond inflation (which we still have not consistently reached, with real wages falling again throughout 2025), productivity improvements will also be required.

Labor shortages are industry-specific and regional. They also follow a barbell shape, tending to be clustered among lower skilled workers (e.g., demolition workers, servers, conbini staff) and high-skilled labor (e.g., software engineering, AI experts). At the macro level, the story is quite different.

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