Japanese financial heavyweight SBI has begun cooperating with issuer of USDC stablecoin Circle as they plan to make a major transformation of the Japanese financial landscape using USDC and Web3 Services based on this stablecoin.
Circle and SBI step in as Japan changes crypto environment
In a recent X post, Circle led by Jeremy Allaire spread the word about its new strategic partnership with the Japanese behemoth of the finance industry, SBI Holdings, which is also a leading partner of Ripple Labs in Japan.
Since the government of the country issued a revised version of its Payment Services Act in early June this year and set firm regulations for stablecoins, Circle and SBI decided to take that opportunity and enter the Japanese market together in the form of a collaboration.
The above-mentioned regulation was made in order to stimulate both the creation and circulation of stablecoins with the goal of helping Japan to advance toward a Web3-based economy.
The newly revised Payment Services Act speaks of stablecoins that are pegged to a legal tender, i.e., have fiat collateral standing behind them. USDC is fully backed by cash USD and assets that are equivalent to cash, which makes this stablecoin easily redeemable for U.S. dollars.
Committing to complying with new regulations
The reserves backing this stablecoin are stored in different vaults from those to ensure that these collateral funds are thoroughly protected and will not repeat FTX’s fate. As of mid-November this year, USDC boasts more than $12.7 trillion of on-chain transfers that involved USDC.
Now, Circle and SBI Group have signed a memo of understanding to ensure their upcoming collaboration. According to the document, they will together work toward Japanese users starting to utilize stablecoins more frequently, and USDC in particular.
The companies have also made a commitment to comply with the newly implemented regulatory rules regarding stablecoins and communicate with local authorities on compliance. The circulation of USDC in Japan will be conducted via SBI’s own crypto exchange SBI VC Trade. Now this exchange is taking steps to register as a service that provides regulated electronic payment tools.
SBI Shinsei Bank will ensure that Circle gets banking services, which will ensure that Japanese institutional and retail users will have USDC access and liquidity. To cap it all, SBI Group intends to begin using Web3 service solutions provided by Circle. Those include Programmable Wallet, DLT infrastructure and tools for managing smart contracts.
Jeremy Allaire, Circle’s chief executive, stated that the company’s collaboration with SBI will help shape the future of crypto and also become a major milestone for Circle as it will begin rolling out its stablecoin in Japan and the Asia-Pacific.