Three major Japanese banks are gearing up to test stablecoin payments on an Ethereum-compatible network.
According to a press release, Tokyo Kiraboshi Financial Group, Minna no Bank, and the Shikoku Bank are part of the stablecoin experiment.
Ethereum-compatible Japan Open Chain, a blockchain network developed by G.U. Technologies making use of the proof-of-authority (PoA) consensus mechanism, will be used for the stablecoin experiment.
The companies stated, “We will conduct an experiment to confirm that each bank can issue its own stablecoin that can be used in Ethereum wallets such as MetaMask while complying with the Payment Services Act.”
G.U. Technologies claims that the test will initially concentrate on the issuing and remittance of electronic payments, with future ambitions for a stablecoin system incorporating local governments and private businesses.
All stablecoins that run on the Japan Open Chain will adhere to Japanese laws, according to G.U. Technologies.
The new blockchain was created in collaboration with Dentsu, Minna Bank, Pixiv, the Kyoto University of the Arts, and Corgear. Japanese Open Chain is currently undergoing beta testing.
For the experiment, each of the participating banks is responsible for developing and issuing its own stablecoin on the Japan Open Chain. The blockchain can allegedly process 1,000 transactions per second.
Last June, the Japanese parliament passed a bill establishing the legal status of stablecoins that says the coins must be tied to the yen or another legal tender, and guarantee holders the ability to redeem them at face value.
According to speculations that surfaced in December, FSA was reexamining its ban in order to potentially allow their usage in 2023. Meanwhile, the Bank of Japan (BoJ) is ready to launch a pilot program in April to test the use of the digital yen to examine the potential difficulties and advantages of a CBDC.
