Japanese banks Tokyo Kiraboshi Financial Group, The Shikoku Bank, and Minna no Bank are reportedly launching a stablecoin to improve payments.
Three Japanese banks are planning a stablecoin experiment to implement a payment system that meets legal requirements. according to a Press release published on Thursday, the banks involved are Tokyo Kiraboshi Financial Group, The Shikoku Bank and Minna no Bank. The trio plans to implement a system developed by Web3 infrastructure company GU Technologies on the Japan Open Chain.
The press release, which shed light on the Japanese banks’ stablecoin payment scheme, said:
“Tokyo Kiraboshi Financial Group, Minna no Bank and The Shikoku Bank will participate in this demonstration experiment, and stablecoin electronic money will be issued and remitted on the Japan Open Chain through the stablecoin issuance and management system developed by the company.”
Furthermore, the announcement also stated:
“In the future, we will implement a stablecoin system that meets legal requirements and promote efforts to popularize stablecoins such as business-to-business remittances and general consumer use through demonstration experiments involving governments. local and private companies.
The release provided other information about the stablecoin experiment, including use cases and benefits. Amid the pre-existing stablecoin dynamics, the companies explained:
“We will experiment to make sure each bank can issue their own stablecoin that can be used in Ethereum wallets like MetaMask while complying with Japan’s new fund settlement laws.”
The three banks agreed that a proven financial institution stablecoin issuance system would ensure asset backing on Japan’s Open Chain. The law-compliant fully Japanese public blockchain is also fully compatible with the Ethereum blockchain.
Use Cases and Benefits for the Issuer/User of the Japanese Banks Stablecoin Scheme
The expected use cases of the stablecoin experiment include the issuance of stablecoins as a community currency and Web3-enabled payment methods. In addition, participating banks are also seeking new methods of payment and remittances between individuals and businesses in Japan and abroad. This development could replace Zengin Net and SWIFT Network services in space.
The stablecoin scheme planned by Tokyo Kiraboshi Financial Group, The Shikoku Bank, and Minna no Bank also directly benefits issuers and users. Benefits for stablecoin issuers include increased revenue from settlement and exchange fees and the creation of opportunities to use new payment data. In addition, issuers, including banks and trust banks, could also see higher investment gains due to the increase in bank deposit accounts.
Meanwhile, the users of the stablecoins themselves could benefit from the proposed decentralized payment system. These benefits include significantly reduced remittance and settlement fees and continued support for foreign currency payments, including USD-pegged stablecoins. In addition, users can also use the assets as a medium of exchange for other digital assets, including non-fungible tokens (NFTs).
Stablecoin adoption
Japan has steadily gravitated towards the adoption and issuance of stablecoins amid the emerging popularity of cryptocurrencies. The Japanese parliament passed a stablecoin-focused set of rules on investor protection following the Terra collapse in 2022.
Tokyo is also looking to allow stablecoins issued outside of Japan to be listed on local exchanges. Expected “foreign” stablecoins include USD Coin (USDC) and Tether (USDT).
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify the crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
