Payment services company Circle is considering launching a stablecoin in Japan following the implementation of new legislation governing stablecoins in the country on June 1, 2023.
The co-founder and CEO of Circle, Jeremy Allaire, sees Japan as a potentially significant market for stablecoins if they are widely adopted for international trade, foreign currency transfers, and commercial transactions.
In an interview with CoinDesk Japan, Allaire praised Japan’s stablecoin bill as a crucial achievement by the government and the Financial Services Agency as it positions the country as a pioneer in establishing a regulatory framework for foreign stablecoins.
In December 2022, the Financial Services Agency of Japan began efforts to relax restrictions on foreign stablecoins in the country. Under the updated Payment Services Act, stablecoins backed by legal tender are officially recognized as “electronic payment methods” and permitted for issuance. The new rules requires stablecoins, which are redeemable at face value, to be pegged to the yen or another form of legal tender. Also, only regulated financial institutions such as banks, trust firms, and registered money transfer agencies are authorized to issue stablecoins.
With the new legislation and supportive regulatory framework, Japan has become an attractive destination for companies like Circle. The country offers favorable conditions for the adoption and growth of stablecoins, attracting interest from financial institutions and companies in the stablecoin sector.
Japanese financial organizations have been actively observing the country’s stablecoins sector. Mitsubishi UFJ Trust and Banking Corporation recently announced its plans to launch its own stablecoin platform.
Allaire also mentioned that Circle has been actively pursuing collaboration opportunities to expand its reach across different markets globally. The company recently obtained a Major Payment Institution (MPI) license in Singapore. The licence enables it to offer both domestic and international money transfer services, as well as digital payment token services in the country.
Jeremy Allaire has also expressed a strong interest in Hong Kong’s ambitions to establish itself as a prominent hub for stablecoin and digital asset markets. Allaire believes that recent developments in Hong Kong could potentially shed light on the future prospects of these sectors in Greater China.
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