Binance partners with major banks for stablecoin launch in Japan.

Binance partners with major banks for stablecoin launch in Japan.

The Blockchain Industry: Japan’s Growing Stablecoin Market

Source: Jezael Melgoza/Unsplash

The world of blockchain technology continues to expand and evolve, with new developments and partnerships constantly being announced. Recently, Binance, one of the largest cryptocurrency exchanges, revealed its plans to launch stablecoins denominated in the dollar, euro, and yen in Japan next year 1. This initiative is made possible through a partnership with the trust banking arm of Mitsubishi UFJ Financial Group (MUFG), highlighting the growing interest in stablecoins within the Japanese market.

Stablecoins are digital tokens that are designed to maintain a stable value, typically pegged to a fiat currency like the dollar or yen. They offer advantages such as faster money transfers and settlements, making them an attractive option for users in the cryptocurrency space 2. The announcement from Binance comes after the passing of a law in Japan back in June that clarified the legal status of stablecoins 3. This legal clarity and the potential benefits of stablecoins have sparked interest among financial institutions in Japan, leading to a rush to launch stablecoins in the country.

MUFG, one of Japan’s largest financial institutions, has been engaged in discussions with multiple parties about utilizing its blockchain platform, Progmat, to mint stablecoins tied to foreign currencies 4. Tatsuya Saito, MUFG’s vice president of products, believes that the stablecoin market in Japan has the potential to reach a substantial size of up to 5 trillion yen ($34 billion), which is approximately one-fourth of the estimated current global market 5. This highlights the significant opportunity that Japan presents for stablecoin adoption and usage.

To carry out its issuance plans, Binance will need to acquire a license in Japan as an electronic settlement methods transaction business provider 6. Once the stablecoins are introduced, users will have the ability to use them for cryptocurrency trading and potentially engage in payment services 7. This move by Binance marks their official entry into the Japanese market, following their acquisition of the Japanese crypto exchange Sakura Exchange BitCoin (SEBC) in November 2022 and the subsequent rebranding to Binance Japan K.K. 8.

It’s not just Binance and MUFG that are eyeing the stablecoin market in Japan. Orix Bank, a Japanese financial institution, is reportedly exploring the possibility of issuing stablecoins in the country 9. Orix aims to commence testing stablecoins denominated in yen, dollar, and other currencies in October, with a target launch date in 2024 10. These stablecoins will be backed by fiat deposits and utilize the Japan Open Chain blockchain, developed by Tokyo-based G.U. Technologies and its partners 11. Circle, the company behind the USDC stablecoin, has also revealed plans to launch a stablecoin in Japan, recognizing the potential of the Japanese market for their stablecoin adoption 12.

In summary, the introduction of stablecoins by Binance, along with the interest shown by other financial institutions such as MUFG, Orix Bank, and Circle, highlights the rapid growth of Japan’s stablecoin market. With clear regulations in place and the benefits that stablecoins offer, including faster transactions and settlements, Japan presents a significant opportunity for the adoption and usage of stablecoins. As the blockchain industry continues to evolve, collaborations and partnerships like these will shape the future of digital currencies in Japan and beyond.

References:


  1. “Binance Announces Plans to Launch Stablecoins in Japan” – Bloomberg↩︎

  2. “Binance Announces Plans to Launch Stablecoins in Japan” – Bloomberg↩︎

  3. “Binance Announces Plans to Launch Stablecoins in Japan” – Bloomberg↩︎

  4. “Binance Announces Plans to Launch Stablecoins in Japan” – Bloomberg↩︎

  5. “Binance Announces Plans to Launch Stablecoins in Japan” – Bloomberg↩︎

  6. “Binance Announces Plans to Launch Stablecoins in Japan” – Bloomberg↩︎

  7. “Binance Announces Plans to Launch Stablecoins in Japan” – Bloomberg↩︎

  8. “Binance Announces Plans to Launch Stablecoins in Japan” – Bloomberg↩︎

  9. “Financial Institutions Rush to Launch Stablecoins in Japan” – Crypto Briefing↩︎

  10. “Financial Institutions Rush to Launch Stablecoins in Japan” – Crypto Briefing↩︎

  11. “Financial Institutions Rush to Launch Stablecoins in Japan” – Crypto Briefing↩︎

  12. “Financial Institutions Rush to Launch Stablecoins in Japan” – Crypto Briefing↩︎