- Three Japanese banks have announced their decision to experiment with stablecoins on Ethereum-compatible blockchain.
- The experiment is an initial step towards the companies’ venture to issue legally adhered stablecoins,
- The banks would use a system developed by GU Technologies on the Japan Open Chain.
Three Japanese banks, including Tokyo Kiraboshi Financial Group, Minna no Bank, and The Shikoku Bank, have initiated their venture on experimenting with stablecoins on an Ethereum-compatible blockchain as an initial procedure for the issuance of stablecoins in adherence to Japanese law.
In detail, the banks would issue their own stablecoins and depend on a system developed by the Web3 infrastructure company GU Technologies. The system would use Japan Open Chain, a public blockchain fully compatible with Ethereum.
GU Technologies, on March 2, announced the launch of the experiment for the issuance of stablecoins via a Twitter thread:
Notably, the companies announced that the stablecoins could be used on Ethereum wallets, adding:
We will conduct an experiment to confirm that each bank can issue its own stablecoin that can be used in Ethereum wallets such as MetaMask while complying with the Payment Services Act.
Significantly, the initial procedures of the proof-of-concept (PoC) experiment would focus on issuing and transferring cryptocurrencies, pointing toward the future development of the stablecoin system.
Interestingly, the experiment by the banks is expected to be a positive sign towards Japan’s adoption of cryptocurrencies and the blockchain ecosystem. The stablecoin system that requires regulation is a piece of evidence of the increasing security and stability of the financial system, along with its increased efficiency.
In addition, the experiment would create in Japan a more stable financial system with fewer risks, especially related to the volatility of crypto.
As per the announcement, local governments and private companies would also be involved in the PoC trial for the issuance of the stablecoins backed by assets; the experiment has already begun.