Circle Considers Stablecoin Launch In Japan

Circle, the payment services company, is considering the issuance of a stablecoin in Japan following the implementation of legislation governing stablecoins on June 1, according to Jeremy Allaire, the co-founder and CEO of Circle. In an interview with CoinDesk Japan, Allaire expressed that if stablecoins gain wider adoption for cross-border trade, foreign currency transactions, and global commerce, Japan could become an immensely significant market.

Circle is considering issuing a stablecoin in Japan, given that legislation governing stablecoins took effect on June 1, Circle CEO Jeremy Allaire said. Japan’s revised Payment Services Act certifies stablecoins backed by legal tender as an “electronic payment method” and allows…

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Japan leads in Regulating Overseas Stablecoins

Japan’s stablecoin bill positions it as one of the first countries to establish a regulatory framework for the utilization of overseas stablecoins, a development that Allaire regards as “the most important thing the government and the Financial Services Agency have done.” Circle is particularly interested in forging partnerships within Japan, as Allaire himself visited the country last month.

Under Japan’s revised Payment Services Act, stablecoins backed by legal tender are certified as an “electronic payment method,” and their issuance is allowed. However, strict regulations are in place for stablecoin issuers. Stablecoins must be pegged to the yen or other legal tender and guarantee holders the right to redeem them at their face value. Only licensed financial institutions, such as registered banks, money transfer agents, and trust companies, will be permitted to issue stablecoins.

The Financial Services Agency of Japan had previously lifted the ban on overseas stablecoins in December of the previous year, marking a significant step forward in facilitating the integration of stablecoins into the country’s financial landscape. Circle has recently obtained a Major Payment Institution (MPI) license in Singapore, enabling the company to provide digital payment token services, cross-border money transfer services, and domestic money transfer services within the city-state.

Major Japanese financial institutions have also been exploring the potential of stablecoins, with Mitsubishi UFJ Trust and Banking Corporation announcing its plans to establish its own stablecoin platform called Progmat. Circle’s interest in launching a stablecoin in Japan underscores the company’s commitment to leveraging the evolving regulatory landscape and emerging opportunities in the digital asset space to foster innovation and provide efficient payment solutions.