TOKYO — Singapore-based blockchain startup Startale Group is looking to strike gold not only in finance but also in the entertainment sector, as it rushes to develop a digital ledger for intellectual property through its partnership with Sony Group.
“Right now we are making two chains, one of which is with Sony called Soneium,” said Startale’s Japanese founder and CEO Sota Watanabe in an interview with Nikkei Asia, when he also provided details about a collaboration with Japanese financial giant SBI Holdings as well as his outlook on the broader cryptocurrency market amid regulatory changes.
A Sony-Startale joint venture developed Soneium, which officially went live this month. Since becoming accessible to the public, it has over 500 million processed transactions and 5.4 million active wallets.
On Thursday, the companies deepened their partnership further, announcing that Sony’s corporate venture capital vehicle, Sony Innovation Fund, will invest an additional $13 million in Startale. The tech conglomerate had invested $3.5 million in 2023.
Soneium will be “a platform for entertainment” that is designed “to help protect IP by detecting potential IP violations and infringement,” he said.
The 30-year old explained that he hopes to further pursue “building an IP registration platform where all creative works can be registered” and protected against artificial intelligence. Companies and AI agents who wish to access certain IPs “can access them through smart contracts with permission, paying fees that are then distributed on-chain to the original creators.”
Watanabe stressed that it is important to have “killer” uses for crypto and blockchain technologies in order to gain investor confidence. While fiat-currency-linked stablecoins have become “pretty much a killer use case in finance, we need other cases beyond finance,” he said, adding that he aspires to “make IP finance or entertainment finance.”
He also pointed out the fast-moving nature of the industry, which often makes it difficult for the Japanese government to adapt to its speed. “My approach is to make use cases in the U.S. and across the globe, then come back to Japan,” he said.
Noting that it will be key to set up an IP registration platform while there are still few competitors, Watanabe said, “Over the next one to two years, the focus will be on establishing a platform that truly empowers creators and ensures they capture the value of their work.”
Startale is also working with SBI to create a real-world asset (RWA) trading platform, where tokens of RWAs such as bonds, stocks and mutual funds can be tradeable on top of the blockchain.
The two aim to build a blockchain that is “optimized for on-chain finance, designed to enable 24/7, borderless trading of tokenized real-world assets,” Watanabe said. “Our goal is to foster greater financial inclusion, unify markets and attract more international investors.”
Startale and SBI in December also signed a memorandum of understanding to jointly develop and launch a yen-denominated stablecoin.
Watanabe is also the founder of Astar Network, a public blockchain originating from Japan. A public blockchain refers to a decentralized network where anyone can participate in transactions.
Recent regulatory shifts surrounding crypto in Japan are “super positive for the country,” Watanabe said.
Japan currently relies on crypto exchanges and the Japan Virtual and Crypto Assets Exchange Association to significantly self-regulate. But the country’s financial watchdog, the Financial Services Agency, is looking to regulate crypto assets under the Financial Instruments and Exchange Act, which would treat them as investment products similar to stocks and bonds. The FSA aims to submit a bill during this year’s regular parliamentary session.
“Crypto has been recognized as a volatile asset but these changes can provide strong confidence to investors, especially institutional ones,” Watanabe said.
“I think the border between crypto and fiat, as well as crypto and equity is melting down,” he continued “Eventually, what we would like to do is bring the world on-chain and create the next civilization.”
“We are facing the first digital civilization. I strongly believe that AI agents, stablecoins and blockchain technology will become the fundamental technologies to make it happen.”
Asian financial hubs are rushing to embrace crypto, with markets like Hong Kong and Singapore heating up the competition.
Watanabe said that “Japan has a huge opportunity” to attract investors as moves by the FSA could lead to safeguarded innovation. “I think a lot of the investors will be joining, so I’m pretty optimistic,” he said, but added that “the issue is whether Japanese companies or people can make a globally leading use case or not.”
While Hong Kong is “politically very much unstable,” Singapore “remains strong” as a hub with “a lot of talented people and companies based there,” he noted.
“But when it comes to the government’s strategic move, it’s getting weaker I think,” Watanabe said about Singapore, raising the bankruptcy of crypto exchange FTX Trading as a reason.
FTX, previously one of the world’s most prominent digital asset platforms, was backed by state investment arm Temasek. Founded by Sam Bankman-Fried, FTX filed for bankruptcy protection in 2022.
“A lot of Singaporeans lost money,” making it difficult for the government to “take a strong stance toward crypto,” he said.
Another advantage for Japan, according to Watanabe, is that big companies are open to partnering with startups in the crypto space. “A big difference between the U.S. and Japan is that American startups want to dominate big companies. But in Japan collaboration is preferred and many value harmony which is unique.”
“What we fundamentally don’t have right now is a distribution power,” he pointed out. “The tech is ready. Crypto is getting stronger. But without a distribution channel, ordinary people will never use it,” he explained, adding that through strong collaborations with big companies, smaller crypto agents can acquire large distribution channels.
