"Let's work together to liven up the market" The background of the partnership between exchange companies and the future both companies envision 【Emergency Interview with Nakamura from Melcoin and Isaka from Coincheck】 | CoinDesk JAPAN

Mercoin and Coincheck announced a collaboration aimed at expanding the domestic cryptocurrency market. Mercari users will be able to trade cryptocurrencies handled by Coincheck through Mercoin. From Mercoin's perspective, the number of tradable assets will increase dramatically from the current three.

What was the background of the partnership that surprised the industry between the two companies, and what are their future goals? We asked Mr. Keita Nakamura, CEO of Mercoin, and Mr. Tomoyuki Isaka, Director and President Executive Officer of Coincheck, immediately after the announcement of the partnership.

The number of Mercoin trading pairs has rapidly expanded

──I just found out about the partnership news a moment ago, and I am still surprised while conducting the interview. "A business partnership agreement regarding collaboration has been concluded," but it seems that the specifics will come later.

Mr. Nakamura: I was also checking if the release went out without any issues. The general scheme is as stated in the press release, and customers of the Mercari app will be able to open an account with Coincheck through the Mercari app, allowing them to trade the cryptocurrencies handled by Coincheck. Currently, we are dealing with three cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), and XRP, but others will also become available for trading through Mercaroin.

──Users do not need to move outside the Mercari app?

Mr. Nakamura: We are thinking of proceeding in that way. From the customer's perspective, it won't be significantly different from before, but they will be able to access Coincheck's services.

Mr. Isaka: For our customers, the number of tradable Mercoins will increase significantly. Coincheck will provide services in the form of "embedded finance" behind the scenes of Mercoin.

Mr. Nakamura: In the industry, we believe that the customers we have acquired so far will start opening accounts with Coincheck to trade new tokens. We expect that the number of Coincheck accounts will increase dramatically.

Mr. Isaka: Let's work together to revitalize the cryptocurrency market and do it on a large scale.

Go Bold

〈The interview proceeded in a relaxed atmosphere, which is hard to believe right after the announcement of a large-scale partnership.〉──Since when had the discussions been ongoing?

Mr. Nakamura: We started discussing this seriously about 3 to 4 months ago. Melcoin has been increasing its number of accounts to some extent, and the number of tradable assets has also been gradually increasing. With the scalability of services and the trends for the future becoming clearer, I was thinking that I wanted to make a bold move next. However, there was also the belief that even if we were to challenge this alone, the market would not change significantly, which is why I reached out.

Mr. Isaka: He called for us to proceed with the value of the Mercari Group, "Go Bold," and we decided to move forward together.

──Did Coincheck have any objections to the call from Mercoin?

Mr. Isaka: I thought our way of thinking was similar from the beginning. We had often talked about getting many customers to hold crypto assets and increasing various use cases. When I was told, "Let's do it together," the conversation went smoothly, and we concluded that "it might be good for both of us," and we discussed what realistic patterns might exist.

──Was there nothing difficult, like a hurdle?

Mr. Nakamura: I had concerns about whether this initiative would be perceived positively. We are entering the industry as latecomers, and the characteristics of our customers differ significantly from those of traditional cryptocurrency users. This unique approach is possible because we have such customers, but I was worried about whether they would see value in it or perceive it positively.

However, as Mr. Isaka mentioned earlier, the world that both companies are aiming for is quite similar, and there was no sense of discomfort while talking. I believe that our perspectives on achieving mass adoption and shaping the future of cryptocurrencies are aligned. In that sense, there were no significant hurdles.

Mr. Isaka: That said, it is entirely a new initiative. Broadly speaking in finance, embedded finance has already seen examples such as Banking as a Service (BaaS) from banks. Moreover, in this case, since Melcoin also holds a license for exchange operations, the service framework is very similar, and I thought that even if there were problems, they could be resolved normally. However, since this is the first time, we had thorough discussions for several months, which led to this announcement.

──Certainly, Coincheck had announced that it would open its services to external parties.

Mr. Isaka: We have been progressing with the opening of services until now. In that context, there is a record of growth in the number of cryptocurrency accounts since Melcoin's entry. I thought it would be very interesting to do this together. It is truly Go Bold.

Overwhelming Insights into "Seamless Service Delivery"

〈CEO of Melcoin, Keita Nakamura〉──Will Melcoin users need to open a new Coincheck account?

Mr. Nakamura: That's right. We will verify identity and also conduct anti-social checks.

Iizaka: It's unfortunate that I can't show you specifics at this timing, but as expected from the Mercari Group, they have overwhelming knowledge regarding product usability and seamlessness, and I don't think customers feel much stress.

Mr. Nakamura: Originally, within the Mercari app, we have been providing a series of experiences by combining the flea market service "Mercari", the financial service "Merpay", and the cryptocurrency asset service "Mercoin". This service integration conceptually has similar aspects, and there were quite a few parts that could be repurposed. We have designed it so that customers can experience it without any discomfort.

──The release included the expression "through mediation by Melcoin," but since we already have a license for trading business, we are not collaborating as the newly established "cryptocurrency intermediary business."

Mr. Nakamura: It will be a partnership among exchange businesses. However, as part of the Mercari Group, we anticipated that the revised Payment Services Act would make it easier for Mercari and Merpay to collaborate with cryptocurrency due to the establishment of cryptocurrency intermediary services. Therefore, it can be said that we were inspired by the intermediary business. Moving forward, I believe we will take a more proactive approach while effectively utilizing the business laws.

Will this be the first step towards industry reorganization?

〈Coincheck Director and CEO Tomoyuki Isaka〉──Currently, it is anticipated that the regulatory law in the cryptocurrency industry will transition from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA), leading to an increased focus on regulatory compliance, which may accelerate M&A activities. Although the background is different this time, it could potentially have an impact that serves as a first step for the entire industry.

Mr. Nakamura: I thought it might be good to make our approach a bit more flexible. Since we are able to reach out to those who are encountering cryptocurrencies for the first time or are part of the light user segment, I wanted them to see the deeper, broader world of cryptocurrencies and finance. However, providing a wide range of tokens safely is not easy. That’s why I believe that collaborating with those who have the know-how can create a significant impact, and I would be pleased if it brings new insights to the industry, such as "Oh, there is a way to do this."

Mr. Isaka: Currently, the costs borne by each company are increasingly rising, and especially the investment in security has become significant. I believe there are quite a few areas where it would be better to share parts and bring together know-how. We are working on security as a financial group, and the Mercari group has a high level of know-how, providing safe services to over 10 million customers, including the provision of passkeys.

I want to aim for greater heights together by sharing our areas of expertise. Security investments are not limited to the cryptocurrency industry, but formalizing rules, including what both companies are doing, will likely raise industry standards even higher. Here, I believe it is important to proceed in a big and bold manner.

Mr. Nakamura: Security is the most important factor, and that's why companies have been working independently on it until now. Security also translates into competitiveness and is not something that can be openly shared. However, in the future, by collaborating, we may be able to clarify the areas we need to protect and the areas we need to work on, while also distributing the focus across the industry as a whole. I believe that there will be initiatives that can help grow the industry. It will also be important to clarify how we can ensure security when collaborating with people from other industries, including those involved in on-ramps and off-ramps, and I think this initiative will be crucial for that.

Bridging Different Industries

Mr. Isaka: The industry will not grow significantly unless we mix with people from various different industries, so I want to be the connector. Mercari has a very large transaction volume and has various customer touchpoints. It is very important to be able to provide cryptocurrency trading in such areas.

In terms of industry discussions, recently various papers have been released from the White House, and the impact on society is becoming increasingly significant. For example, discussions are shifting towards social implementation, including stablecoins. With this partnership between the two companies, there will be a substantial customer interface for both, so I believe the impact when doing something new will ripple across various industries.

Mr. Nakamura: In terms of customer base, Mercari is very large. This time, the functions that customers can access will increase, and I believe this will make it easier to create connections with industries outside of cryptocurrency based on this case. I think this will be a valuable first step to enhance our functions as a platform by filling in the areas where we are lacking.

──People from other industries might find it easier to discuss collaboration if "Mercari and Coincheck join forces."

Mr. Isaka: I think it's a good thing that we can work together on certain aspects. Many people are interested in cryptocurrencies but may not know where to start. In that context, collaborating with different industries in the future could be a breakthrough.

The Future That Both Companies Envision Together

〈Coincidentally, the two are dressed almost the same, and people around are asking, "Will you participate in the M-1 preliminaries?"──It has been reported that cryptocurrency transactions through Coincheck via the Mercari app will begin in the first half of next year, but will it be possible to trade all Coincheck tokens at that time?

Mr. Nakamura: Details will come later. Considering the response and safety on our side, we will consider whether it is better to have someone who can trade everything or to gradually increase it. However, I want it to expand dramatically rather than gradually.

In line with this initiative, we will also change the structure of the service itself. Until now, we have provided a limited number of tokens aimed at casual users, but it will feel like a significant step up. I haven't been able to show it to Iisaka-san yet, but I believe it will be something amazing.

──What does the partnership foresee for the future?

Mr. Nakamura: This announcement is still just a "starting point", and what we can show is only the tip of the iceberg. I feel that there are many things we can collaborate on, even going quite deep together. First and foremost, our goal should be mass adoption, and I believe there are numerous possibilities beyond that. For example, I want to challenge not only payments but also include utilities, and I want to provide our customers with opportunities to engage with blockchain. I envision a long-term partnership where we can expand both functions and services and tackle challenges together.

Mr. Isaka: First, we will provide various services to our overwhelming customer touchpoints. This announcement is about "we have partnered," but we should soon see the actual screens, service details, and even campaigns.

For Coincheck, it is the first time to open up and provide such a large functionality, so we will thoroughly prepare for it. While it will be a dual approach with Coincheck's services, we also want to actively work together with partners to expand the market. We hope to use this partnership as an opportunity to involve people from different industries and promote it together with Mercoin.

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