Joichi Ito, the President of Chiba Technical University and co-founder of Digital Garage, has collaborated with Russell Cummer, the founder and former chairman of Paidy, to launch AltX Research KK. Their venture focuses on developing the Japan Smart Chain (JSC), a blockchain infrastructure designed to align with Japan’s regulatory landscape. JSC is a sovereign Ethereum-compatible blockchain that aims to address the unique regulatory and consumer protection requirements in Japan.
This blockchain initiative is expected to unlock significant efficiencies for Japanese businesses, consumers, and innovators by creating a compliant and secure framework for digital transactions. By bridging the gap between domestic regulations and blockchain technology, JSC is set to transform Japan’s digital ecosystem.
Addressing Regulatory Challenges with Innovation
Japan’s adoption of Web3 technologies has been hindered by a lack of compatibility between local regulations and the broader development of blockchain technologies globally. This regulatory mismatch has created reluctance among Japanese businesses to explore blockchain-based solutions for applications such as payments, loyalty programs, and user-friendly financial services.
Japan Smart Chain provides a sovereign solution to these challenges, offering a blockchain infrastructure that adheres to the nation’s legal framework. By embedding compliance mechanisms at the infrastructure level, JSC ensures faster, cost-effective, and more secure digital services for businesses and consumers. This approach eliminates barriers that have previously deterred companies from investing in blockchain technologies.
Technological Framework and Features
Japan Smart Chain stands out as a public Layer 1 Ethereum-equivalent blockchain validated entirely within Japan by industry leaders. Central to its framework is the Mizuhiki Protocol, which integrates digital Know Your Customer (KYC) and Anti-Money Laundering (AML) methods directly into the infrastructure layer.
The Mizuhiki Protocol offers user-controlled identification features combined with advanced eKYC tools tailored to Japanese regulations. These tools are made available at no cost to projects and end-users within the JSC ecosystem, reducing compliance burdens for operators while enhancing user privacy and security.
JSC’s infrastructure focuses on eliminating repetitive form submissions across applications and enabling users to interact securely with regulated services without oversharing personal information. This streamlined approach aims to foster widespread Web3 adoption in Japan by prioritizing convenience and trust.
Guiding Principles for Sustainable Growth
The development of Japan Smart Chain is guided by four core principles: sovereignty, security, safety, and scalability.
Sovereignty: JSC emphasizes Japan’s control over its blockchain network, ensuring minimal influence from foreign regulatory or geopolitical forces. The blockchain is validated entirely within Japan, adhering strictly to domestic laws.
Security: Built on Ethereum’s foundation, JSC incorporates enhanced infrastructure to safeguard digital assets through the expertise of Japan’s top engineers.
Safety: The platform embeds compliance policies, such as AML and anti-social measures, at the infrastructure level. This allows users of regulated services, like stablecoins, to interact safely with verified accounts.
Scalability: JSC includes Layer 2 solutions from launch, offering cost-effective infrastructure for current and future L2 projects. This ensures the platform can support a growing user base without compromising efficiency.
Redefining Blockchain’s Role in Japan
Japan Smart Chain’s vision is to set a global standard for secure and scalable blockchain infrastructure tailored to sovereign requirements. By addressing Japan’s regulatory challenges at the foundational level, JSC empowers businesses to make long-term investments in Web3 technologies.
The platform is designed to alleviate redundancy and financial burdens faced by regulated businesses, particularly in sectors such as payments, gaming, and finance. By fostering trust and compliance, JSC provides a robust framework for the next wave of blockchain innovation, making it a key player in Japan’s digital transformation.
With its innovative approach and alignment with Japan’s unique regulatory needs, Japan Smart Chain has the potential to become a model for blockchain adoption in other regulated markets worldwide.