Episode 126: The largest bitcoin exchange in the world by volume that is licensed in the US, EU, and Japan
Today Joel Edgerton joins us to discuss how bitflyer is the largest bitcoin exchange in the world by volume that is licensed in the US, EU, and Japan.
Joel is currently the COO at bitFlyer USA, a global cryptocurrency exchange with offices in Tokyo, San Francisco, and Luxembourg. Joel leads the company’s expansion in the USA, developing a strong team with institutional and retail customer experience. He has advocated for cryptocurrency exchanges to go beyond simply offering products, to better protect customer interests and solve customer problems.
Prior to joining bitFlyer USA, Joel held senior positions in Tokyo and London with Citibank, State Street, Legg Mason and BNP Paribas. He also founded his own fintech company offering personalized financial advice via algorithms based on behavioral economic theories. Joel is bilingual (Japanese and English) and holds an MBA in International Finance.
*Disclaimer. None of this information is financial advice.
The following transcript was created using artificial intelligence. There will be some grammatical errors below.
00:00:03:25 – 00:00:30:12
Richard Carthon: Hello everyone. Welcome to another episode of Crypto Current, your host here, Richard Carthon and today I’ve got a very special guest who has operations out in Japan, but unfortunately isn’t there right now, but still it’s super awesome because their company has been around for a while and it’s international. And again, has a ton of emphasis on making sure that we continue to broaden the Crypto and Blockchain space across all continents. We have Joel with bitFlyer, how are you doing today?
00:00:31:24 – 00:00:33:22
Joel Edgerton: I’m doing great. Thanks for having me on.
00:00:34:15 – 00:00:40:06
Richard Carthon: Of course. Well before we dive in too deep, how about you let us know a little bit about yourself and give us some background?
00:00:41:04 – 00:01:07:18
Joel Edgerton: Sure, yeah. I started in tech. I worked for IBM for a while, kind of got a little bit bored with that, went into finance with a master’s degree, was on the dark side of finance in traditional finance. So, I worked in Tokyo, London, Citigroup, State Street, Legg Mason, a lot of different places, a lot of different things. The I.T. and finance is kind of the background I’ve got.
00:01:08:08 – 00:01:21:27
Richard Carthon: Amazing. So I mean, with being in finance, I mean, it sounds like a great transition over into the Crypto, Blockchain space. Well, but what was the first time that you learned about Cryptocurrency, what year was it and how did it even get on your radar?
00:01:22:26 – 00:02:17:12
Joel Edgerton: It was around 2015 or so, working in London, there was a friend of mine that sat next to me and he and I were reading the news about Bitcoin and things were going crazy and Crypto is all cool and everything like that. And he was British, I was American so naturally we were arguing about things all the time, but yeah, he and I just started talking about it and like almost every day we were talking about Crypto and what it means and what Blockchain means. BNP Probe is a very traditional French bank, but they were very early getting into Blockchain to have their own division of Blockchain. They’ve actually implemented it inside their traditional banking world. So yeah, I was exposed to it quite early there. I was quite good, I even tried to get into you know, investing, but my wife kind of stopped me on that one.
00:02:18:24 – 00:02:19:09
Richard Carthon: Gotcha.
00:02:19:11 – 00:02:21:12
Joel Edgerton: But no, it was all good from the early days around 2015 or so.
00:02:22:02 – 00:02:39:07
Richard Carthon: That’s amazing. And so of course as you kind of transition out of the traditional finance world into creating what is now bitFlyer, give us that kind of transition into what made you want to get out of traditional finance and go just head first into Cryptocurrency.
00:02:40:14 – 00:03:28:23
Joel Edgerton: I’ve done many things in traditional finance, I worked in capital markets, I worked in asset management, trust, custody, businesses, I even did insurance, which is really boring, but once you get into you know, you see the promise of Crypto. There’s so many problems within finance that are still left to be solved. I mean, it’s been around for thousands of thousands of years, but there’s still tons of problems, lots of inefficiencies and Blockchain technology is a way to solve a lot of that. So, when you’re in that space, it’s more obvious to be able to see what the potential is for the change that you can make. So, it’s quite exciting to get into it, it’s still very early days, a lot of easy things that need to be solved, some longer term things that need to be solved, so it’s just exciting. And that’s why I wanted to get into it.
00:03:29:18 – 00:03:37:10
Richard Carthon: Awesome. And so tell us the transition into bitFlyer. When did you create this company and what was the purpose of you starting this up?
00:03:38:21 – 00:04:29:01
Joel Edgerton: Yeah. So, the company was originally created by two Japanese guys, one named Yuzo Kano and the other is Komiyama and they didn’t start it in a garage, they actually started in a bakery, which is interesting, right? If you want to start out, a bakery is a great place to do it. So they started out, it’s kind of around 2014, with the idea of creating a way for people to get into Crypto, particularly Bitcoin in a safe way. So, this is around the time of the Mt. Gox scandal and everything like that. So they came from Goldman Sachs, they brought that traditional view into their new company that they set up to make it safe for the individual investor. And it really took off in Japan, but now the largest Crypto company in Japan, they’re usually within the top five or so in the world because Japan is a huge market for Crypto.
00:04:29:03 – 00:04:29:18
Richard Carthon: Right.
00:04:29:20 – 00:05:19:23
Joel Edgerton: They’ve actually integrated it into normal buying, so you can actually take your bitFlyer account and go into an electronic store and buy electronics with Bitcoin. You can do that today in Japan. They have a lot of different services that kind of make it really available. You don’t see it yet in other countries, but in Japan it’s quite advanced. So, they built this structure out to just bring it to everyday people and the promise of Bitcoin and Cryptocurrency. So I was there in Japan, I met with them, and thought it was really exciting. They had a huge opportunity in the U.S. They really wanted to grow and get into the U.S. They wanted to make sure it was a truly international company, a global company. We’ve got offices in E.U. as well, so they asked me to come over and kind of help them accelerate the growth in the U.S.
00:05:19:27 – 00:05:34:13
Richard Carthon: That’s amazing. There’s a couple of things I kind of want to go back to that I would like you to expand on. So for example, you said that the people in Japan right now can use their accounts to go and buy things with Bitcoin. Can you kind of walk us through like what does that use case, like how are they actually doing that?
00:05:35:19 – 00:06:07:24
Joel Edgerton: Yeah. So there’s kind of two major ones that they’re linked in to. So there’s a company called BitCamera, which is kind of the Best Buy of Japan and you can go in and they have a counter and they have these big signs that say Bitcoin and you can just go in and purchase things using a Bitcoin wallet. So they’ve actually built that payment infrastructure into their point of sale systems. It’s still not the fastest thing in the world because they have to wait for the confirmation of it.
00:06:07:26 – 00:06:08:11
Richard Carthon: Right.
00:06:08:13 – 00:06:30:04
Joel Edgerton: But it’s there today where you can just purchase, you don’t need to pull money out of your wallet. You can just go ahead and buy with Bitcoin. The other one is they’re linked with one of the largest booksellers in Japan, kind of the Barnes and Noble of Japan and their loyalty program, so you can actually get the loyalty points at this bookstore and then turn it into Bitcoin on your account so it’s really cool.
00:06:30:06 – 00:06:30:21
Richard Carthon: Wow.
00:06:30:23 – 00:06:42:05
Joel Edgerton: So it’s really not just a company that’s totally dependent on trading and what’s the price of Bitcoin, but how does it make your life easier and simpler and how can you use Bitcoin and Crypto in your everyday life.
00:06:42:20 – 00:07:16:29
Richard Carthon: No doubt. And I mean, that brings up a really good point that I’ve mentioned multiple times in the past of like how do we get to mass adoption. And mass adoption is doing things just like you just said that bitFlyer’s doing right now in Japan with having everyday use cases of, Hey I want to go buy this thing, I have Bitcoin, I should be able to pay for this Bitcoin and this is that way to get that done. In the beginning of this segment, we talked about how you are expanding or bitFlyer is expanding into multiple countries. Are they beginning to create these types of functionalities in other countries like the United States as well? You know, what does that game playing kind of look like?
00:07:17:27 – 00:07:26:09
Joel Edgerton: Well absolutely, we want to do it. Every single country is a little bit different, the laws are different, the culture is different, the speed of adoption is gonna be different.
00:07:26:11 – 00:07:26:26
Richard Carthon: Right.
00:07:26:28 – 00:07:56:09
Joel Edgerton: This is not gonna be something that’s very simple and easy. I mean, the e-commerce world has taken decades to get to where it is today. Cryptocurrency is still in the early stages, so the quick answer is yes. Absolutely we want to make it like that so it’s in there to help you on your day to day stuff, help you save money, help you save time. Absolutely want to go there. We need to build out the infrastructure to build out the ecosystem to make that happen, but it’s absolutely where we want to go.
00:07:57:15 – 00:08:13:24
Richard Carthon: That’s amazing. So, I know that you say you’re in a couple of different countries right now, but like give me all of the ways that people can come and use bitFlyer right now. So like if I am a listener right now, like what are the ways that depending on what country I’m in, like how can I come in and use bitFlyer?
00:08:15:05 – 00:08:42:26
Joel Edgerton: So obviously in Japan, you have the biggest infrastructure in place so you can use it in multiple ways there, in the U.S., we’re still building it out. So in the U.S., you have your traditional Crypto exchange where you can buy, sell on the exchange. We also have an easy simple buy sell program and that’s about as far as we’ve gotten at this point and Europe is the same. So we’ve got licenses in the U.S. and about 47 states, 48 states.
00:08:42:28 – 00:08:43:13
Richard Carthon: That’s good.
00:08:43:15 – 00:09:05:18
Joel Edgerton: We’re even in Hawaii now, which is kind of new, so that’s good. So we’re about all over the place, so we just need to build it out. And then we are also licensed in Europe, so the entire European Union we cover with those same type of products. And then the next stage is to build out the infrastructure that we’ve built in Japan and now carry that over to the U.S. and E.U.
00:09:05:27 – 00:09:34:15
Richard Carthon: It’s amazing. So I mean, y’all are expanding, you told me you know, before we came on the show like how y’all have been around for a while and it’s really cool to be able to see that growth and with this I know that you’ve seen a lot changed kind of in the market over the last several years, but especially in 2020 with COVID and everything else going on, but what are some things in this space, in the Crypto, Blockchain space that you think people should be aware of that you think could happen in the relative short future?
00:09:35:24 – 00:10:31:12
Joel Edgerton: Yeah. I mean there’s a lot of experimentation and innovation going on. If you’re in the Crypto space, you hear DeFi all the time and it’s a very exciting space. It’s not the safest place to be, but it’s very exciting the innovation that’s going on. Being able to take things like borrowing and lending and getting interest returns on your assets are very, very basic in traditional finance, but it’s new in the Crypto world. So they’re trying to figure out how they make that work in a Blockchain, how do they make that work so it’s safe and people are not going to get scammed and that’s easy to do and everything like that. So the basic infrastructure is kind of being experimented with, but that customer experience is not there, that safety is not there, but I think that’s a very exciting area that we need to get into and we need to mature and build it out.
00:10:31:14 – 00:11:16:19
Joel Edgerton: There’s a lot of experiments as far as how you do liquidity, which is more for the institutional side because now we see a lot of institutional business coming into the Crypto world, bringing billions and billions of dollars into it. How do you scale up to something like that? I mean, these are guys that trillions of dollars go through their financial systems every single year. So, a billion dollars doesn’t really mean that much to them, but it means a lot within the Crypto world. So, we have to be able to scale and be able to provide the services that they expect. And then on the individual customer side, we need to do a better job of making things simple and easy for people. If we have to explain it then it’s too difficult, right?
00:11:16:26 – 00:11:17:11
Richard Carthon: Yeah.
00:11:17:13 – 00:11:29:13
Joel Edgerton: It needs to be simple enough to just, people get it and they can use it, we need to do a better job of that. So there’s a lot of work I think being done on the design side to make things simpler that is pretty exciting.
00:11:29:15 – 00:12:15:06
Richard Carthon: For sure and I’m going to kind of backtrack to you’re in a unique spot in that you’ve been in the traditional finance field and I also come from that as well. And so I kind of have more of a tailored question for you in the sense of especially being the U.S. of elections coming up, we have everything that’s going on with our dollar kind of doing whatever it’s doing right now and equities I think potentially are over leveraged and there’s a lot that just this giant snowball that is being formed right now. What do you think or how do you think Cryptocurrency is positioned to handle what is coming within the U.S. equities market?
00:12:18:08 – 00:12:41:00
Joel Edgerton: Wow, that’s a very leading question. I mean, I think you’re right that there is a huge disconnect between what’s happening in the financial world and what’s happening in the real world. When you have millions of people unemployed on one side, but then you have record stock prices on the other it doesn’t make sense because the stock price is supposed to reflect the reality of the economy and send you proper price signals.
00:12:41:02 – 00:12:41:29
Richard Carthon: Right.
00:12:42:01 – 00:12:49:24
Joel Edgerton: It doesn’t do that anymore because the Fed and the federal governments have intervened so much in there that the price signal was lost, right?
00:12:49:27 – 00:12:50:12
Richard Carthon: Yeah.
00:12:50:14 – 00:13:27:24
Joel Edgerton: So, essentially manipulated and that’s actually one of the reasons why Crypto and Blockchain, in particular Bitcoin were created at the end of 2008 with the last financial crisis. There was so much intervention that people were starting to lose trust in the financial markets and the government’s capability to manage it. So the idea was, Okay, we will create something that doesn’t need that trust where the trust is built in, you just trust the code and separate the power of money from governments, so they can’t inflate away your savings and wipe out your savings. And you see this happening you know, in Venezuela today.
00:13:27:26 – 00:13:28:11
Richard Carthon: Right.
00:13:28:13 – 00:14:15:06
Joel Edgerton: So I think it’s very important that there is this alternative path where you can protect your savings, you can protect your wealth that you worked hard to build and you’re not dependent on decisions that are being made that you don’t really have a say in. So, I think that’s very important, but it’s still very, very early days, there’s still a lot of work that needs to be done to make it happen, but I think it’s very promising. And then when you see what’s happening in the stock market, to kind of loop back to that conversation, it can’t constantly inflate like that, there has to be a time where it comes back down to reality and it links back into reality. And when that happens you know, people are gonna get hurt.
00:14:17:14 – 00:14:54:11
Joel Edgerton: With all things, you have to make sure that you protect yourself, you know what’s happening in the markets and you have a proper balanced portfolio to kind of balance those things out. If the government starts doing what they did after World War II and just inflates away the debt, then all the senior citizens today that are on fixed income are gonna be really hurting because the buying power of their money is just really going to decrease. It’s a delicate situation, I think people need to be aware of that and they need to protect themselves.
00:14:54:13 – 00:15:35:05
Richard Carthon: I agree. I was speaking with a previous speaker and one of the things that they brought up, which is interesting because with your company being based in Japan, so Japan’s when a market went as high as it ever did, it went down and it’s never recovered and gotten back to that point and the United States market looks very similar to when that happened, right? And I really think that when you look at once this snowball finally just takes beat and does what it’s going to do, that Crypto could be positioned to be this absolutely amazing place where you start to try to diversify your portfolio and Crypto looks very appetizing. So I think right now could be a really awesome time to be exploring in this space.
00:15:35:07 – 00:15:38:29
Joel Edgerton: Yeah, no. It’s a really cool time, totally agree.
00:15:39:24 – 00:16:04:25
Richard Carthon: For sure. And with that said, outside of all of that’s going on with bitFlyer and everything that y’all are building on. What do you think is something that our listeners should be looking out for, let’s call it the next five to 10 years in this next decade? So as you said, it’s very early. Crypto’s very early and where we presently are, but like for where we’re headed and what’s to come, what are some things that you think people should be looking out for?
00:16:06:07 – 00:17:08:05
Joel Edgerton: I think one thing is to not get caught up in all the hype, to look for the real underlying value. These projects in Crypto are actually trying to solve problems, right? Just like companies that they’re delivering a product in the service, these projects in Crypto are also delivering value and that’s where we need to be focusing. What’s the fundamental value that they’re creating? And then that should reflect into the value of the coin that’s associated with it. So, understand the projects just like you would understand a company that you’re investing in on the stock market. Find the ones that are solving the problems that you think should be solved and those are the ones that you want to watch and to go after. There’s going to be lots of things coming in, you can’t keep track of all of them, so, focus on the things that you can really get into and be interested in and don’t get caught up in the hype.
00:17:08:24 – 00:17:25:25
Richard Carthon: Absolutely. I think that’s always great advice. Do your own research, DYR, do your own research and don’t just blindly go into something. Again, really appreciate your time today Joel, but before you go, what is a final thought that you want to leave with all of our listeners here today?
00:17:27:28 – 00:17:58:17
Joel Edgerton: Good question. I think one of the things that is important to me is to always be curious, right? To always be curious, always be asking what’s behind it. There are a lot of fascinating things happening in the Crypto space, whether you’re interested in finance or even just in the technology in the Blockchain side. So there’s all kinds of interesting stuff, even new business models that are being created. So just be curious, start simple, go with an established firm like bitFlyer, I’ll put my plug in.
00:17:59:00 – 00:17:59:15
Richard Carthon: Yes.
00:17:59:17 – 00:18:23:07
Joel Edgerton: But you know, start simple with somebody that you can trust and be curious and try to understand what’s happening in the space and do your own research. It’s very early days, so there’s all kinds of fun and exciting stuff to get into. There’s still plenty of opportunity for people, it’s still very much a growing market. It’s like being in the Internet and e-commerce in the 1980s, so it’s a long way to go.
00:18:23:09 – 00:18:44:09
Richard Carthon: Absolutely. I would 100 percent echo that. There’s just so much green space, so much green room for us and anyone to be able to get into this space, make your mark and just keep learning, educating yourself and following your curiosity. So again, Joel, really appreciate that final thought. What are some ways that people can connect with you and learn more about bitFlyer?
00:18:44:11 – 00:19:00:04
Joel Edgerton: So I’m on Twitter, so bitFlyer_Joel. I’m also on LinkedIn, so Joel Edgerton at bitFlyer, so you can find me there. And then obviously you contact me through bitFlyer itself.
00:19:01:14 – 00:19:06:21
Richard Carthon: Awesome. Well again, really appreciate your time today. And for everyone listening, Stay Crypto Current.
Crypto Current will be guiding all of you who are new to the cryptocurrency world to becoming a cryptocurrency and blockchain expert. Crypto Current was founded to give access to information to everyone on current events occurring in cryptocurrency and blockchain in a digestible way. Since its creation, we have created content that impacted thousands of people through its podcast, blog, and social media.