Stablecoin Launch Expected by Year-End
The implementation of Japan's revised Payment Services Act on June 1, 2023, has sparked heightened interest in stablecoin issuance backed by fiat currencies.
Stablecoins are blockchain-based digital assets designed to maintain price stability through asset-backed reserves. Under the revised law, they are classified as electronic payment instruments.
Globally, USD-pegged stablecoins like USD Coin (USDC) and Tether (USDT) dominate markets, widely used for cryptocurrency trading and NFT purchases. Their adoption is expanding into cross-border remittances and e-commerce transactions.
Key Regulatory Requirements:
- Domestic issuers (banks, money transfer operators, or trust companies) must hold reserve assets.
- Overseas stablecoins require Japanese distributors to safeguard assets and maintain transaction records for anti-money laundering (AML) compliance.
👉 Learn how stablecoins are transforming global finance
Corporate Payment Market Expansion
The revised law unlocks opportunities for business-to-business (B2B) payment efficiency, particularly for multinational corporations.
- Market Potential: Japan’s B2B payment sector is valued at ~¥1,000 trillion (~3x larger than B2C transactions).
- Cost Savings: Stablecoins reduce intermediaries, lowering transaction fees for cross-border settlements.
Case Study:
- G.U. Technologies provides consortium blockchain solutions to regional banks (e.g., Shikoku Bank) for localized digital stablecoins.
- Their Japan Open Chain platform offers Ethereum compatibility, bridging gaps between traditional e-money and decentralized finance (DeFi).
👉 Explore blockchain innovations in payments
Compliance Updates: Cabinet Office Guidelines
Finalized on May 26, 2023, the Cabinet Office ordinances clarify:
- Ban on Misleading Claims: Algorithmic or crypto-collateralized stablecoins cannot be marketed as "stable."
- User Protection: Money transfer operators must monitor wallet transactions and suspend redemptions if risks arise.
- Bank Involvement: Permissionless blockchains face stricter scrutiny for stablecoin projects.
FAQ: Stablecoins in Japan
Q1: Who can issue stablecoins in Japan?
A: Only licensed entities (banks, trust companies, or registered money transfer operators).
Q2: How are overseas stablecoins regulated?
A: Distributors must hold reserves and comply with AML/KYC rules.
Q3: Can stablecoins replace traditional B2B payments?
A: Yes—they offer faster, cheaper cross-border transactions but require regulatory alignment.
Q4: What’s the role of regional banks?
A: They pilot local stablecoins (e.g., Shikoku Bank) to support regional economies.
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