Japanese Banks to Test Stablecoins on ‘Japan Open Chain’

The “Japan Open Chain” will be used in a stablecoin test involvingJapanese banks. Local governments and private businesses will also be involved.

Japan has taken a major step forward when it comes to stablecoins, with several notable banks testing stablecoin usage on Ethereum-compatible blockchains.

Local media outlets are reporting that domestic banks will issue stablecoins compliant with Japanese laws using a new proof-of-concept.

Participating banks are Tokyo Kiraboshi Financial Group, Minna no Bank and The Shikoku Bank. The test will first focus on electronic money issuance and remittance, and future plans will focus on a stabilization system that meets legal requirements. Local authorities and private enterprises will be involved.

These banks are going to free up their own settlements rather than use settlements already on the market. The reports note that the stablecoins will function with popular wallets like MetaMask. Japanese regulators will also lift this year's ban on foreign-issued firearms.

Gu technologies is the company that is going to develop the system and use the "open chain of japan." it is fully compatible with ethereum.

What is Japan's open network?

Japan Open Chain is an Ethereum-compatible blockchain that GU Technologies has developed in collaboration with Dentsu, Minna Bank, Pixiv, the Kyoto University of the Arts, and CORGEAR. A beta version of the network was also released by the parties.

The network uses the proof of authority algorithm (poa), and the group says it can register more than 1000 transactions per second. Developers will also be looking for future Layer 2 scale-up solutions. Interestingly, they note that Japan’s interest in web3 makes NFT transactions also on the cards.

Japan Stablecoin relaxant laws.

One of the report’s most notable statements was that Japan would lift a ban on foreign stablecoins in 2023. Starting today, the country's regulatory authorities forbid crypto exchanges to rate stablecoins as usdt. With the change, exchanges can handle stablecoin trading under “the condition of asset preservation by deposits and upper limit of remittance.”

At the same time, the Bank of Japan places a strong emphasis on its CBD. The digital yen is set to experience a pilot program in April. Japan has become increasingly interested in this digital asset since the start of its development in 2021. The pilot project will concentrate on the technical feasibility of a digital version and will involve private enterprises.