• Circle CEO Jeremy Allaire has expressed interest in issuing a stablecoin in Japan, given that new rules governing stablecoins have come into effect.
• The Payment Services Act certifies stablecoins backed by legal tender as an “electronic payment method” and allows for their issuance.
• Major Japanese financial institutions have been exploring stablecoins, with Mitsubishi UFJ Trust and Banking Corporation announcing its plans to issue its own stablecoin platform, called Progmat.
Circle Considering Issuing Stablecoin in Japan
Finance Circle CEO Jeremy Allaire expressed interest in partnerships in the country, given that new rules governing stablecoins have come into effect on June 1st. The revised Payment Services Act certifies stablecoins backed by legal tender as an “electronic payment method” and allows their issuance. Circle is interested in partnerships in Japan and recently obtained a Major Payment Institution (MPI) license in Singapore.
Japan Embraces Web3
Japan’s government and the Financial Services Agency made it one of the first countries to establish a framework for the use of overseas stablecoins which Allaire considers “the most important thing” they have done. A ban on overseas stablecoins was lifted in December last year allowing only licensed financial institutions like licensed banks, registered money transfer agents and trust companies to be able to issue them.
Rules Governing Stablecoin Issuance
Stablecoins must be pegged to the yen or other legal tender and guarantee holders the right to redeem them at face value. They will also abide by tough rules such as KYC/AML requirements set by financial institutions where they are used or issued from.
Mitsubishi UFJ Trust & Banking Corporation Launches Progmat Platform
Major Japanese financial institutions including Mitsubishi UFJ Trust & Banking Corporation announced plans to launch its own blockchain-based platform called Progmat which is intended for conducting digital asset transactions using foreign exchange currencies such as US Dollars or Euros on top of traditional assets like stocks and bonds. This platform could potentially support various types of cryptocurrencies including Bitcoin (BTC), Ethereum (ETH) or XRP tokens among others soon after its launch later this year.
Implications of Stablecoin Usage In Japan
As usage of cross-border trade, foreign currency transactions, global commerce increases with usage of these tokens; Japan will become an extremely large market becoming more attractive for investors who are looking towards cryptocurrency investments due to their low volatility rates compared with other alternative assets like gold or commodities etc.. These tokens could potentially drive down costs associated with remittances when sending money abroad but would still need further regulatory approval before being adopted commercially across different industries within Japan itself eventually leading up towards mainstream adoption across many different economies worldwide overtime if successful enough over time upon implementation here domestically firstly..