Dento: Using Blockchain Tech to Create a Win-Win for Local Businesses and Tourists in Japan

Japan has been promoting itself to overseas tourists quite heavily for the past few years. Its borders remained almost completely closed during the “COVID era” of 2020-22, cutting off a vital source of foreign income to any business that relied on the traffic.

A new tourism project in Japan aims to boost visitors to smaller regional areas by making it easier for international tourists to pay and earn, using blockchain technology.

Japan has been promoting itself to overseas tourists quite heavily for the past few years. Its borders remained almost completely closed during the “COVID era” of 2020-22, cutting off a vital source of foreign income to any business that relied on the traffic. Its promotion drive included advertising, package deals, and encouraging individuals in tourism-facing industries to use English (e.g., restaurants, hotels, taxi drivers).

Though the campaign (and a low-valued local currency) has successfully boosted the number of international travelers to the country, some problems remain. Tourists who visit Japan tend to visit major cities like Tokyo, Osaka, and Kobe. Smaller regional areas, which may be home to fascinating local industries and picturesque scenery, receive far less than their fair share of the tourism dollar.

This is mainly due to a lack of awareness and language barrier issues that are more prevalent outside the metropolises, Wakuo Saito believes. The slow adoption of digital point-of-sale systems and Japan’s lack of compatibility with international banking systems have also presented unexpected hurdles for tourists in the past. Again, this has improved slightly in the past decade, but not so much in rural areas.

Japan’s largest markets for international tourists are Hong Kong, Taiwan, mainland China, the United States, and Europe. Saito himself hails from Tohoku, a region that was devastated by natural disasters in 2011 and is perhaps in greater need of tourists’ attention.

“I want to decentralize the people who visit Japan,” Saito says. “Not only for cities but for other rural areas.”

Dento’s blockchain and token solution

Dento’s digital token solution, developed with assistance from nChain, is a payment mechanism that focuses on convenience, portability, speed, ease of deployment, and security. Running on the BSV blockchain solves most of these issues: the network’s ability to scale to any size or transaction volume means no delays or congestion, and fees are small enough to be irrelevant. This also means merchants who adopt the scheme don’t need to worry about dealing with major credit card companies or paying their huge service fees. For small, low-margin businesses, that’s a big plus.

For years, believe it or not, competing with credit card companies on fees was one of Bitcoin’s main promises. That promise was discarded along with other Bitcoin benefits as BTC became the static “digital gold” asset it is today, but its original vision lives on today as the BSV blockchain.

Saito notes that much of Japan’s appeal (both domestically and overseas) lies in its cultural adherence to tradition and local customs. Dento’s system is designed to preserve these as much as possible, hence the project’s name—which literally means “tradition” in Japanese.

“I don’t want to change drastically all the rural industries. I want to encourage to preserve tradition in rural areas,” he said.

The Dento project is part technological and part marketing, so the digital token is just one of its elements. The complete system includes an online multi-language portal for tourists to plan their trips, find deals, and also obtain the payment tokens. Once tourists arrive in Japan, payments can be made at participating businesses via QR codes with Dento’s mobile app. Local businesses who sign up will get extra promotion and advertising through those channels, and accepting Dento’s tokens as payment will encourage more tourists to spend money at those businesses.

The project will start with local trials in the Tohoku region, Saito says, but he’d like to see it adopted right across the country. It’s also another potentially profitable use case for blockchain, where its technology truly becomes “the plumbing”—supplying security and infrastructure without requiring any additional knowledge or skill from users.

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