Three Japanese banks are coming together to experiment with stablecoin payments. GU Technologies, a Web3 infrastructure company, has developed a system for the same on the ‘Japan Open Chain.’ The chain is fully compatible with Ethereum and falls in line with Japanese law. Tokyo Kiraboshi Financial Group, Minna no Bank, and Shikoku Bank are the institutions involved.
According to the translated version of the press release, the entities said,
“We will conduct an experiment to confirm that each bank can issue its own stablecoin that can be used in Ethereum wallets such as MataMask while complying with the new payment method.”
Ultimately, they intend to issue a legally backed stablecoin, while coordinating with the test and production environments of banking systems.
Also Read – Japan: FSA to Likely Lift Stablecoin Ban by June 2023
Banks tapping on the business opportunity
Back in June 2022, the Japanese government gave the green signal to a bill that recognized stablecoins as digital money. However, they were required to be backed by Japan’s fiat yen or another legal tender that allowed holders to employ them at face value. By doing so, Japan became one of the first big countries to form a legal framework for this asset class. The bill, however, did not touch upon overseas stablecoins backed by assets like Tether.
However, more clarity regarding the same was provided in January 2023. The government is reportedly looking to allow stablecoins issued outside the country to be listed on local exchanges. Furthermore, exchanges will be allowed to apply for a special license to trade stablecoins. The remittance limit will reportedly be set at 1 million yen [$7500] per transaction. The new regulations are set to be adopted in June 2023.
The latest released statement pointed out that around 20 trillion yen’s worth of USD-linked stablecoins are currently in circulation around the world. Citing the to-be-enforced regulations, the press release pointed out that the banks’ latest initiative intended to foster stablecoin settlements around the world could turn out to be a “big business opportunity.”
Also Read: Bank of England Official: Pound CBDC Presents a ‘Big Opportunity’