Circle Considers Issuing Stablecoin in Japan: New Rules in Effect
• Circle is considering issuing a stablecoin in Japan following the passing of new legislation governing stablecoins.
• CEO Jeremy Allaire commented that Japan will become an extremely large market if stablecoins become widely used for cross-border trade, foreign currency transactions, and global commerce.
• The Payment Services Act certifies stablecoins backed by legal tender as an “electronic payment method” and allows their issuance, while only licensed financial institutions like licensed banks, registered money transfer agents and trust companies can issue them.
Circle Considers Issuing Stablecoin in Japan
Finance company Circle has expressed interest in partnerships in Japan to issue a stablecoin given that new rules governing stablecoins have come into effect on June 1. According to Circle’s co-founder and CEO Jeremy Allaire, if stablecoins become more widely used for cross-border trade, foreign currency transactions and global commerce, then Japan will become an extremely large market.
Legislation Governing Stablecoins
Japan’s revised Payment Services Act certifies stablecoins backed by legal tender as an “electronic payment method” and allows their issuance. Only licensed financial institutions like licensed banks, registered money transfer agents and trust companies will be able to issue them. The country’s Financial Services Agency moved to lift a ban on overseas stablecoins in December last year.
Circle Obtains MPI License
Circle recently obtained a Major Payment Institution (MPI) license in Singapore, which allows it to offer digital payment token services, cross-border money transfer services and domestic money transfer services in the city-state.
Major Japanese Financial Institutions Exploring Stablecoins
Major Japanese financial institutions have been exploring their own options with regards to creating their own stablecoin platforms. Mitsubishi UFJ Trust and Banking Corporation announced its plans to issue its own platform called Progmat.
Global Regulators Wary of Crypto Impact
As global regulators grow wary of the crypto industry’s potential impact on conventional banking systems, they are increasingly embracing Web3 technologies such as blockchain networks and distributed ledger technology for improved data security and transparency within finance operations.