Japanese banks will test issuance and operations with stablecoins. This was announced by G.U. Technologies is the developer of the Japan Open Chain blockchain, on the basis of which the experiment will be conducted.
Japan Open Chain is an Ethereum compatible network that G.U. Technologies was developed jointly with advertising holding Dentsu, digital bank Minna Bank, online art community Pixiv, Kyoto University of the Arts and technology company CORGEAR. The developers claim that the blockchain is energy efficient, and its throughput is more than 1,000 transactions per second.
Three Japanese banks – Tokyo Kiraboshi Financial Group, Minna Bank and Shikoku Bank will issue their own stablecoins on this blockchain. At the first stage, testing will focus on the issuance of coins and transactions within banks. In the future, it is planned to introduce a stablecoin system that meets all legal requirements; at this stage, the project will involve local authorities and private companies.
The announcement states that bank-issued stablecoins will work with popular crypto wallets such as MetaMask.
Japan prohibits transactions with stablecoins pegged to currencies other than the yen, such as USDT. From May 6, this ban will be lifted and banks will be able to issue stablecoins pegged to different world currencies.
Along with this, the rules will come into force, which stipulate that for stablecoins issued domestically, the issuer will have to prepare collateral assets as confirmation. And as an anti-money laundering measure, stablecoin distributors are required to record and report transaction information to regulators.
Meanwhile, the Bank of Japan is focused on its CBDC. A pilot program to test the digital yen system will be launched in April. Japan has been developing this project since 2021. The goals of the new phase of experiments with CBDC will be to test the technical feasibility of integrating digital currency into the existing financial system and improve the development, taking into account the experience of private companies.