Japanese Banks Embrace Ethereum Stablecoins for Innovation

G.U. Technologies, a blockchain tools developer located in Tokyo, revealed on Thursday that it will work alongside three prominent banks in Japan to launch stablecoins on an Ethereum-compatible blockchain. This initiative, known as Japan Open Chain, is currently in its beta phase and is being jointly developed with various entities such as Dentsu, Minna Bank, Pixiv, Kyoto University of the Arts, and Corgear.

While Japan currently prohibits crypto exchanges from listing foreign-issued stablecoins like USDT, regulations are expected to evolve in 2023 for stablecoins that fulfill particular regulatory criteria. G.U. Technologies has affirmed that their Japan Open Chain stablecoins will adhere to Japanese regulations.

The announcement emphasized:

“We will conduct an experiment to ensure that each bank can issue its own stablecoin that is compatible with Ethereum wallets like MetaMask while remaining compliant with the Payment Services Act,”

In collaboration with Dentsu, Minna Bank, Pixiv, Kyoto University of the Arts, and CORGEAR, G.U. Technologies has created Japan Open Chain, an Ethereum-compatible blockchain that is now available in beta. The network utilizes a proof-of-authority (PoA) consensus mechanism and boasts an ability to process over 1,000 transactions per second. Future work will explore layer 2 scaling solutions. The developers are also interested in NFT transactions, noting that Japan’s increasing interest in web3 may facilitate this potential.

As the market for privately developed stablecoins grows in Japan, the Bank of Japan is also concentrating on its central bank digital currency (CBDC). A digital yen pilot program is scheduled for April, which could significantly impact the nation’s financial landscape.

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