Test stablecoin issuance
GUTechnologies, a Japanese company that develops Web3 infrastructure, has started a proof-of-concept to issue stablecoins on the 2nd, based on the blockchain “Japan Open Chain,” which is said to be fully compatible with Ethereum (ETH). announced that
Japan Open Chain is a blockchain that complies with Japanese law. Three financial institutions, Tokyo Kiraboshi Financial Group, Minna no Bank, and Shikoku Bank, will participate in this demonstration experiment. Ultimately, it will be linked with the test environment and production environment of the banking system, aiming to issue a legally backed stable coin.
New 🌟Press Release
“Notice of Start of Demonstration Experiment for Issuance of Stablecoins with Domestic Banks”
Each bank’s own stablecoin that complies with Japanese law @JapanOpenChain To publish on!# Tokyo Kiraboshi Financial Group#Minna no Bank#shikoku bank#stablecoinshttps://t.co/bDcQAyM06t pic.twitter.com/9w2lkSZwf3
— GUnet (@G_U_net) March 1, 2023
What is a stablecoin
A cryptocurrency whose price is always stable. Various stablecoins have been developed whose value is backed by legal currency or virtual currency, or whose price is stabilized by algorithms.
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In the demonstration experiment, the stablecoin system developed by GU Technologies was used for issuance and remittance. GUTechnologies will implement a legally compliant stablecoin system, and through demonstration experiments involving local governments and private companies, will work to spread stablecoins such as inter-company remittances and use by general consumers. .
One of the major features of this stablecoin is that the underlying blockchain is compatible with Ethereum, so it can be used through Ethereum wallets such as Metamask. In the experiment, we will check whether each bank can issue its own stablecoin.
Japan is expected to lift the ban on stablecoins issued overseas this year. GUTechnologies also explained in this announcement that “the revised Payment Services Act, which regulates stablecoins, will be enforced by June this year.”
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The company also cites “expectations for the inflow of funds from around the world through the issuance of foreign currency-denominated stablecoins” as an advantage of stablecoin issuers such as banks and trust banks. After the demonstration experiment, he said that he would like to support the issuance of original stablecoins by various financial institutions, and that he is still recruiting participants for this demonstration experiment.
Here are some examples of stablecoin use cases:
- A new remittance and payment method between domestic and overseas individuals and companies to replace Zengin-net and SWIFT
- Major payment methods in Web3 such as NFT (non-fungible token)
- Any online payment alternative to credit cards
- Buying and selling digital securities issued on the blockchain
- Issuance of stablecoin as community currency
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What is Japan Open Chain?
Japan Open Chain is a blockchain operated by a Japanese company. This press release also explains that Japan Open Chain is a “public blockchain,” and it is expected that in the long term it will be available for both domestic and overseas individuals and corporations. Currently, the following 6 organizations are participating as validators, and it is said that the number of participating organizations will be increased to 21 initially.
- GU Technologies
- everyone’s bank
- Kyoto University of the Arts
GU Technologies points out that the problem with stablecoins is that “algorithm-type coins that actually increase or decrease in value, and pseudo-stablecoins with no backing assets are issued”. In addition, some blockchains have unclear operating bodies and some have legal problems.
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Therefore, he pointed out that there is currently a demand for a blockchain that can be used as a foundation for business with peace of mind. It is said that Japan Open Chain was developed with the aim of achieving sufficient decentralization, high security and stability, operating in compliance with Japanese law, and promoting Web3 business around the world.