Stablecoin issuer Circle signed a Memorandum of Understanding (MoU) with Japanese financial giant SBI Holdings to boost USD Coin (USDC) circulation, establish a banking relationship, and expand its presence in the Asian country, according to a Nov. 27 statement.
Per the statement, several subsidiaries of the traditional financial institution would play an active role in this partnership, including SBI’s VC Trade Limited, which would apply for licensing as an electronic payment instruments service to distribute USDC in Japan.
Additionally, SBI’s Shinsei Bank would provide banking services enabling USDC access and liquidity for Japan-based businesses and users.
The SBI Group also plans to adopt Circle’s Web3 Services solutions like programmable wallets, blockchain infrastructure, and smart contract management tools.
Jeremy Allaire, the CEO of Circle, explained that the partnership between both institutions is a groundbreaking move, saying USDC would become a stablecoin that “can be widely used in the on-chain economy growing in Japan, across many consumer-led Web3 product categories. We can also work with the very large established retail and crypto platforms that SBI Group operates to adopt USDC as a new digital dollar.”
Allaire added:
“Another part of this is bringing direct banking from Japan to Circle’s USDC treasury and settlement operations, which translates to direct and local liquidity between JPY and USDC via the domestic banking system in Japan, building on the recent launch of the same in Singapore, with many more markets coming online soon.”
On the other hand, Yoshitaka Kitao, CEO of SBI Holdings, lauded Japanese authorities for formulating an enabling regulatory environment that would aid the adoption of stablecoins within the region.
In June, Japan’s lawmakers passed a bill that would ensure that all stablecoins are fully backed by “highly liquid cash and cash-equivalent assets” to prevent a recurrence of Terra’s algorithmic stablecoin UST-like collapse.
Meanwhile, the law was one of the many strict regulations adopted by Asian countries as they sought to develop a regulatory framework that protected users. These regulations were crucial in safeguarding FTX Japan customers’ funds from the parent company’s bankruptcy.
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