• Three Japanese banks are experimenting with stablecoin payments.
• The system is being developed by GU Technologies on the Japan Open Chain.
• New rules will be implemented in June to allow Japanese exchanges to list and trade stablecoins.
Japanese Banks Experiment with Stablecoin Payments
Three Japanese banks, Tokyo Kiraboshi Financial Group, Minna no Bank and The Shikoku Bank have partnered with GU Technologies to experiment with stablecoin payments on the Japan Open Chain public blockchain. The new system is designed to meet legal requirements for payment services.
Stablecoins Gaining Popularity in Japan
The popularity of stablecoins has been growing in Japan since the collapse of algorithmic stablecoin issuer Terra in 2022, prompting parliament to pass a set of investor protection rules specifically related to stablecoins. The government also plans to allow foreign-issued stablecoins to be listed on local exchanges in order to facilitate trading. Moreover, new regulations will take effect in June 2021 that allows licensed exchanges to apply for special permission to trade these digital assets.
Proof-of-Concept Issuance of Stablecoins Backed by Assets
As part of this experiment, the three banks will attempt to confirm that each bank can issue its own stablecoin that can be used within Ethereum wallets such as MetaMask while still adhering the Payment Services Act’s guidelines. This proof-of-concept issuance process could pave the way for more widespread adoption and usage of digital currencies backed by actual assets such as fiat currency or gold.
The regulation surrounding digital asset trading and investing is rapidly evolving across all jurisdictions, including Japan which recently passed payment services laws designed specifically for cryptocurrencies and digital tokens like stablecoins. By partnering with GU Technologies and launching a proof-of-concept program, these three banks are signaling their intention to remain at the forefront of technological innovation while adhering applicable regulations.
As technology continues to advance so too do regulators’ attempts at understanding and adapting it into existing frameworks as evidenced by recent laws passed in Japan related exclusively towards cryptocurrencies and other digital tokens like stablecoins. Three major Japanese institutions have now joined forces with GU technologies develop a viable system for issuing their own unique version of a compliant cryptocurrency token on the Ethereum blockchain – an achievement that could potentially open up new opportunities for businesses throughout Japan looking into using cryptoassets as an alternative form of payment settlement or investment vehicle..