Opening Address at GFJ 2026: The Gold in the Cracks: Japan's Financial Renaissance | Ravi Menon, Chairman, Global Finance & Technology Network (GFTN)

The Gold in the Cracks: Japan's Financial Renaissance

Ravi Menon
Chairman, Global Finance & Technology Network (GFTN)[1]

Opening Address at GFTN Forum Japan
Nihonbashi, Tokyo
25 February 2026

Good morning, everyone. It is wonderful to be back in Tokyo for GFTN Forum Japan 2026.

The last time I addressed this community was two years ago.

Since then, the world hasn't simply changed. It has been re-organised.

• Geopolitics has fragmented the multilateral global order.

• Trade corridors have shifted and supply chains reconfigured.

• And technology — especially artificial intelligence — is compressing decades of transformation into just a few short years.
  

Japan itself is on the cusp of change with Prime Minister Takaichi's historic election, with renewed focus on innovation, fiscal ambition, and strategic planning.

THE ART OF KINTSUGI

I want to frame our conversation today through something deeply Japanese.

It is the art of what this country - and indeed the world - must now do with its financial system - Kintsugi ["keen-tsoo-gee"] - literally, 'joining with gold'.

• Kintsugi is the centuries-old Japanese practice of repairing broken pottery not by disguising the damage, but by filling the cracks with lacquer mixed with powdered gold.
• The philosophy is striking.
  
  • The repair does not try to hide what happened. It honours it. And the result?
  • The vessel emerges more beautiful, more valuable, and stronger than the original.

By no means is the world's financial system broken – it is resilient, strengthened by regulatory reforms following the global financial crisis.

But cracks are showing - technological disruption, demographic pressure, and

geopolitical stress.

So, what do you fill the cracks with? What is the powdered gold?

• I believe the gold is technology.
• And the art — the true Kintsugi — lies in how we apply it:
  • with care;
  • with purpose; and
  • with respect for the vessel we are repairing
    

Let me take you through this in four acts: the Vessel, the Cracks, the Gold, and the art of Repair.

THE VESSEL: JAPAN’S FOUNDATION

Start with the Vessel - what Japan has built.

Japan's financial infrastructure ranks among the most reliable anywhere in the world.

• Payment systems, card networks, banking frameworks, securities settlement — these are the products of decades of meticulous engineering and prudent oversight.

The regulatory architecture provides the clarity for innovation to happen safely.

• The Financial Services Agency has developed one of the most comprehensive fintech policy frameworks globally — covering consumer protection, transparency, competition, and supervision, with a coherence that many jurisdictions aspire to.
• The 2018 Banking Act revisions mandated open APIs across the banking system — creating the plumbing for data sharing at national scale.
• In 2023, the Payment Services Act was amended to create a clear regulatory framework for stablecoins.

This is a vessel of remarkable craftsmanship. But is the vessel ready for what comes next?

THE CRACKS: WHERE PRESSURE HAS BUILT

Every great vessel, over time, develops fractures. There are three Cracks in Japan's vessel.

The first fracture - demographic.

• Japan's population is aging faster than almost any nation in history. One in three persons is now over 65.

• The working-age population is shrinking, and the talent gap is acute.
  • Japan faces a shortage of over 360,000 IT professionals today, potentially rising to 450,000 or even 800,000 by 2030 depending on demand.^[i]
  • Over 70% of Japanese organisations report being understaffed in critical areas like cloud, AI, and cybersecurity^[ii].

The second fracture is infrastructure - what people here call the '2025 Digital Cliff’.

• METI identified this crisis years ago: 60% of Japan's large companies are operating on legacy IT systems that are now two decades or more old.

• These systems are in critical need of modernisation.

• But the people who understand these legacy systems are retiring. The knowledge is walking out the door.

The third fracture is connectivity.

• Japan’s startup ecosystem is vibrant — accelerators, venture capital, corporate innovation programmes.

• But too many fintech startups struggle to move beyond pilots. They can't scale across multiple customers or markets.
  

THE GOLD: TECHNOLOGY AS THE REPAIR

In Kintsugi, the craftsman uses gold to fill the fractures. The gold transforms, more than repairs.

In finance, the gold is technology — artificial intelligence, asset tokenisation, and open finance.

• Not technology for its own sake.

• But technology applied with purpose - to specific fractures - creating something stronger than what existed before.
  

Let me trace three gold lines across Japan's financial landscape.

First - AI and the demographic fracture.

• Japan's talent shortage cannot be solved by hiring alone. The numbers are simply too large.

• AI is potentially a powerful response to Japan’s demographic pressures.

• Financial institutions are deploying generative AI for operational efficiency, customer service, risk analytics, and increasingly revenue generation.
  • compliance monitoring;
  • trade surveillance;
  • customer onboarding;
  • fraud detection.We are now moving to agentic AI — autonomous systems that can take over entire workflows.

For a country facing a shrinking workforce, AI is not optional innovation. It is strategic necessity.

• And Japan, with its deep engineering culture and rigorous quality standards, is uniquely positioned to deploy AI responsibly — setting benchmarks others can follow.

Second - tokenisation and the infrastructure fracture.

• Tokenisation offers something powerful: the ability to build new digital rails alongside legacy systems, gradually replacing what cannot be modernised while preserving what still works.
• Globally, tokenised asset issuance is expanding across sovereign bonds, real estate, private credit, and green finance.

Japan has the opportunity not just to participate – but to lead in setting institutional-grade standards.

• Japan has emerged as a global frontrunner in the real estate securities token offering market because it was one of the first major economies to establish a clear, comprehensive legal framework for digital securities.

  • MUFG's Progmat Coin, a blockchain-based platform for digital asset issuance and settlement, demonstrates what becomes possible when regulatory clarity meets institutional ambition.

Third - open finance and the connectivity fracture.

• Japan's open banking framework has created a technical foundation.

• But the transition to true open finance requires standardised data governance, interoperability across platforms, and consent frameworks that give consumers genuine control.
  

A clear area of opportunity is in payments connectivity.

• Japan's progress from 13% cashless in 2010 to over 42% in 2024 is remarkable but still lags other Asian countries like South Korea and Singapore.[iii]
• Japan’s new target of 80%. It is achievable.
• Like Japan, Singapore initially suffered from "fragmented cracks"— numerous payment schemes, QR codes, and e-wallets.
  • Singapore did not replace the different schemes and wallets but used a "golden thread" - a single, interoperable QR standard to join them into a unified vessel.  It is Kintsugi at work.
• The other aspect of connectivity is merchant enablement - especially among the small and medium enterprises that employ 70% of Japan’s workforce.

• That's where fintech can make its greatest impact: serving the businesses too small for traditional banks but too important to leave behind.

THE ART OF REPAIR: WHY METHOD MATTERS

What separates Kintsugi from ordinary repair is that the craftsman's hand matters as much as the gold.

In finance, the craftsman's hand is regulation and cross-border collaboration.

Regulation must become more outcome-based.

• As AI agents take over workflows, as tokenised securities and stablecoins evolve, regulatory frameworks must focus on outcomes rather than prescribing every technical detail.

• Outcome-oriented regulation is harder to design - but more durable. It gives firms confidence to make long-term investments.

Collaboration must become more structured.

• Across Asia, structured collaboration has accelerated innovation – joint sandboxes, shared experiments, harmonised standards.

• While competition among financial institutions is natural, collaboration to address common challenges and achieve synergies is equally important.

Japan's co-operation with Singapore under the FSA-MAS FinTech framework is a good example of cross-border collaboration

• Japan has deep expertise in infrastructure development and quality control.

• Singapore has experience in regulatory innovation and ecosystem design.
• When these strengths connect, everyone benefits.
• GFTN exists to make these connections systematic.

CONCLUSION

Let me close where we began - the vessel. Japan enters this phase of technological change from a position of strength.

The challenge now is to repair — with gold.

That requires three things.

• One, sustained strategic collaborations.

  • Regulators, financial institutions, technology companies, and startups need to work together systematically.
• Second, enabling regulation that balances innovation with stability.
  • Innovation without prudence creates risk.
  • Prudence without innovation creates stagnation.
  • Japan has been skilled at finding the right balance, and must continue to do so.
• Third, openness to learning from others while staying true to what works in the Japanese context.
  • The skill lies in discernment — knowing what to adopt, what to adapt, and what to leave aside.

There is a famous saying about Kintsugi: the repaired vessel is more beautiful …
… not because we cannot see where it broke - but because we can.

The gold tells the story of survival, of transformation, of renewal.

Japan has all the ingredients.
The cracks are showing.
The gold is ready.
And the craftsmen — all of you in this room — are here to do the work.

Let the work begin.

[1] Mr Menon is also Singapore’s Ambassador for Climate Action and Senior Adviser to the
National Climate Change Secretariat at the Prime Minister’s Office. He was previously
Managing Director of the Monetary Authority of Singapore, from 2011 to 2023.

[i] Makana Partners (2025). Unleashing the 2025 Japan Job Market: A Makana Partners Perspective
https://www.makanapartners.com/unleashing-the-2025-japan-job-market-a-makana-partners-perspective

[ii] Linux Foundation (2025). 2025 Japan Tech Talent Report Now Live
https://www.linuxfoundation.org/press/2025-japan-tech-talent-report-now-live

[iii] Reuters (2025). Japan's shift to cashless society prods BOJ call for payment innovation
https://www.reuters.com/world/china/japans-shift-cashless-society-prods-boj-call-payment-innovation-2025-06-11/