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 The proof-of-authority (PoA) consensus method will be used for the stablecoin experiment that will be carried out using Japan Open Chain, which is a blockchain network that was established by G.U. Technologies and is called Japan Open Chain.
“We will perform an experiment to ensure that each bank may issue its own stablecoin that can be used in Ethereum wallets such as MetaMask while still complying with the Payment Services Act,” the firms said in a joint statement. “We will execute the experiment as soon as possible.”
According to G.U. Technologies, the test will first focus on the issuance and remittance of electronic payments. In the future, the company hopes to include local governments and private firms into a stablecoin system.
According to G.U. Technologies, any and all stablecoins that operate on the Japan Open Chain will be compliant with Japanese legal standards.
The new blockchain was developed via a partnership between Dentsu and Minna Bank, as well as Corgear, Pixiv, and the Kyoto University of the Arts. The Japanese Open Chain project is now undergoing testing known as the beta phase.
For the sake of the experiment, every one of the participating banks is going to be in charge of creating and issuing its very own stablecoin on the Japan Open Chain. There are rumors that the blockchain can perform 1,000 transactions in a single second.
Stablecoins were given a legal status by a law that was approved by the Japanese parliament in June of 2018. The measure stipulates that stablecoins must be pegged to the yen or another form of legal money, and holders must be guaranteed the opportunity to redeem them at their face value.
The Food and Drug Administration (FDA) is said to be reviewing its prohibition with the intention of perhaps lifting it in 2023, according to rumors that arose in December. In the meanwhile, the Bank of Japan (BoJ) is getting ready to roll out a pilot program in April to test the usage of the digital yen in order to investigate the possible challenges and benefits of a CBDC.
Compiled by Coinbold