Tools 3 Japanese Banks Start Stablecoin
According to a press release issued on Thursday, three Japanese banks will experiment with stablecoin payments as they work to implement a system that meets legal requirements.
Tokyo Kiraboshi Financial Group, Minna no Bank, and The Shikoku Bank will use a system developed by GU Technologies, a Web3 infrastructure company, on the Japan Open Chain, a public blockchain fully compatible with Ethereum that is legal in Japan.
“We will conduct an experiment to confirm that each bank can issue its own stablecoin that can be used in Ethereum wallets such as MetaMask while complying with the Payment Services Act,” the companies said.
Japan is moving towards accepting stablecoins. Following the failure of multibillion-dollar algorithmic stablecoin issuer Terra in 2022, parliament passed a set of stablecoin-specific rules aimed at protecting investors. In addition, the government intends to allow stablecoins issued outside of the country to be listed on local exchanges. Furthermore, new rules that will go into effect in June will allow Japanese exchanges to apply for a special licence to trade stablecoins.
According to the announcement, the proof-of-concept for the issuance of stablecoins “backed by assets” has already begun through demonstration experiments involving local governments and private companies.
(With inputs from Shikha Singh)
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