- Summary:
- Japan recently passed new regulations giving stablecoins legal recognition in payments and the MoU ensures Circle and SBI's compliance.
Circle, the company behind USDC stablecoin, has signed a memorandum of understanding with SBI, the Japan-based financial services company, to promote the circulation of USDC in Japan. With a market capitalization of $24 billion at the time of writing, the MoU will see the two companies establish a banking partnership to promote the widespread adoption of the world’s second-largest stablecoin.
Stablecoins and their place in the Web3 revolution
Initial plans call for both parties to put money into increasing USDCs’ availability throughout Japan, with an eye towards expanding Circles’ Web3 offerings later on. Furthermore, Shinsei Bank, SBI’s Japanese subsidiary, will provide Circle with banking services designed to give greater liquidity to businesses and retail investors in the country. In addition, to advance its digital asset strategy, the SBI Group will integrate Circle’s programmable wallet blockchain technology and smart contract management capabilities.
The partnership positions Circle and SBI well to comply with Japan’s new stablecoin regulations and will leverage the two company’s market strengths to promote USDC adoption. This approach will entail the promotion of USDC by SBI Holdings as a “digital dollar,” to attract more business and retail useage.
The announcement of the alliance follows the enactment of Japan’s Payment Services Act in June, which established standards for stablecoins. In light of the new regulations, stablecoins that are “collateralized” with fiat currency now have the same legal status as fiat currency. As a result of the new rules, SBI Holdings must become a registered electronic payments services provider in Japan.
In addition to promoting Circle’s web3 services in Japan, SBI Holdings, will collaborate with the company to develop a banking relationship and increase the adoption of Circle’s services in the country. This is ultimately aimed at enhancing mass adoption of Circle’s other Web3 services.
This agreement, according to Circle’s analysis, will not only catalyse a faster adoption of stablecoins in Japan, but also help the country’s advancement towards a globally-competitive Web3 economy. This is critical to Japan as it takes on competition from Hong Kong, Singapore, and South Korea.