Following the recent passage of legislation permitting stablecoins in Japan, payment services business Circle is considering the issuance of a stablecoin. Jeremy Allaire, the firm’s co-founder and CEO, maintained that if stablecoins are more used for global commerce, foreign currency transfers, and cross-border trade, Japan might become a key market.
Japan’s stablecoin bill establishes a framework for the use of abroad stablecoins, which Allaire views “the most important thing the government and the Financial Services Agency have done.” He stated that Circle is looking for collaborations in Japan, which he visited last month.
Stablecoins backed by legal cash are recognised as a “electronic payment method” under Japan’s amended Payment Services Act, and their production is permitted.
Nonetheless, stablecoin issuers like Circle will be subject to the strict limitations outlined in the amended laws. For example, issued stablecoins must be tied to the Japanese Yen or other legal denominations and allow holders to redeem them at face value.
Furthermore, only licenced financial organisations such as registered money transfer agents, trust businesses, and licenced banks will be permitted to create stablecoins.
A number of Japanese financial organisations have stated their desire to issue stablecoins. Mitsubishi UFJ Trust and Banking Corporation, for example, recently revealed plans to establish a stablecoin platform called Progmat.
Circle, which recently secured a Major Payment Institution (MPI) licence in Singapore to provide digital payment services, cross-border money transfer services, and domestic money transfer services, will now attempt to establish a presence in Japan.