The Bank of Japan Hokkoku has made waves by becoming the first bank in Japan to offer a stablecoin backed by bank deposits. The development has left Japanese crypto enthusiasts wondering about the potential pros and cons. Additionally, there are questions about the utility of a stablecoin.
The Bank of Japan has launched the Tochika stablecoin. The initiative follows the success of the Tochituka app, which was launched last year in partnership with the Suzu City Government. The app allows citizens to earn Tochipo points and spend them at select local stores. Additionally, existing Hokkoku Bank account holders can now use the same app to load their own Tochika stablecoin.
This stablecoin is secured by deposits and can be used for spending convenience at participating merchants. Moreover, this move is considered pioneering because Japan is a country where cash is still the norm.
Hokkoku therefore aims to attract retail businesses by offering a competitive merchant rate of just 0.5% for cashless transactions through the app. In addition, the bank seeks to persuade businesses that issue paper gift certificates to go digital by adopting point-based transactions facilitated by the app.
Future endeavors in Japan Looking ahead, Hokkoku Bank plans to introduce its in-app person-to-person payment service by the end of the year. Furthermore, it aspires to attract other banks within Ishikawa Prefecture to join its initiative. Additionally, it has expressed ambitions to expand to other regions in the future.
The technology behind this innovative platform was developed by Digital Platformer. Moreover, it is believed to leverage Hyperledger Iroha. It was developed by Japanese company Soramitsu. While banks around the world have been taking on stablecoin initiatives, Hokkoku’s focus on retail customers and backed by physical bank deposits sets it apart from others in the space.
Meanwhile, the crypto regulatory landscape in Japan has seen recent changes. New laws have been passed allowing three types of stablecoins, including those backed by banks. This regulatory support extends to trust-backed stablecoins. This is represented by MUFG’s Progmat Coin platform, which facilitates the issuance of stablecoins backed by various trust banks. Another important initiative in Japan is DCJPY, a deposit token project set to launch this quarter.
