Three Japanese banks —Tokyo Kiraboshi Financial Group, Minna Bank, and Shikoku Bank — will issue experimental stablecoins compliant with Japanese laws via the Japan Open Chain, according to a March 2 statement.
The three banks are expected to issue legally backed stablecoins that comply with the Payment Services Act. These stablecoins can be used in Ethereum wallets like MetaMask.
According to the statement, this demonstration would focus on the issuance and remittance of electronic money. Future experiments with these stablecoins would concentrate on those that meet legal requirements and involve local governments and private companies.
Meanwhile, the stablecoin issuing system was developed by Japanese tech giant G.U.U Technologies. The web3 infrastructure company said its system is built on an Ethereum-compatible blockchain, “Japan Open Chain.”
G.U Technologies said:
“In Japan, the revised Fund Settlement Act, which regulates stablecoins, will be enforced by June this year, and it will be possible to issue not only Japanese yen but also currencies around the world. Therefore, we believe that it will be a big business opportunity for Japanese financial institutions, including the possibility that Japan will be responsible for settlements all over the world.”
In Dec. 2022, Japan lifted the ban on foreign-issued stablecoins. In 2023, the Asian country launched a central bank digital currency (CBDC) pilot program.
Japan Open Chain
The Japan Open Chain is an Ethereum-compatible blockchain built by CORGEAR, Dentsu, G.U Technologies, Minna Bank, Pixiv, and the Kyoto UniveG.U.ty of the Arts.
The blockchain was built to comply with local Japanese laws and has “necessary and sufficient decentralization, high-security performance, and stability.” According to its website, the network can process over 1,000 transactions per second.
