On November 27, 2023, SBI Holdings, Inc. and Circle Internet Financial announced their strategic partnership focused on using Circle’s USDC, to enhance banking services and promote the adoption of Web3 Services in Japan.
“Our partnership with SBI Holdings represents a shared vision for the future of digital currency, and is a significant milestone in Circle’s expansion plans in Japan and Asia Pacific,” said Jeremy Allaire, CEO and co-founder of Circle. “We are excited to collaborate with SBI towards setting new standards in the financial sector in Japan.”
Strategic Partnership
SBI Group and Circle have formalized their partnership by signing a Memorandum of Understanding (MOU). The primary focus of this collaboration is on facilitating the circulation of USDC and expanding the usage of stablecoins in Japan. Both organizations are unwavering in their commitment to adhering to regulations associated with stablecoins, emphasizing transparent communication with regulatory authorities.
To initiate the circulation of USDC stablecoins within Japan, SBI VC Trade Co., Ltd. has decided to register itself as an electronic payment instruments service. However, it is essential to note that this is currently pending approval from Japanese authorities.
SBI Shinsei Bank Limited, a subsidiary of SBI Holdings, will assume a crucial role in delivering banking services to Circle.This strategic move ensures USDC access and liquidity for businesses and users in Japan. Furthermore, as part of its digital asset portfolio strategy, SBI Group plans to incorporate Circle’s Web3 Services, encompassing features such as Programmable Wallet, blockchain infrastructure, and tools for smart contract management.
Regulatory Landscape in Japan
Being at the forefront of the digital asset economy, Japan implemented revisions to its Payment Services Act (the Revised Payment Services Act) on June 3, 2023, introducing a regulatory framework specifically for stablecoins. This regulatory adjustment is strategically aimed at fostering the issuance and circulation of stablecoins within Japan, marking a pivotal stride in the country’s progression toward a Web3 economy.
Under the Revised Payment Services Act, there is a notable emphasis on “collateralized” stablecoins, requiring backing by legal tender. Noteworthy in this context is Circle’s USDC, which distinguishes itself by its complete backing of 100% with highly liquid cash and cash-equivalent assets. The stablecoin’s unique feature of being redeemable at a 1-to-1 ratio for U.S. dollars, coupled with the maintenance of separate reserves at prominent financial institutions, serves as a testament to its unwavering dedication to regulatory compliance.
Closing Thoughts
The partnership between SBI Holdings and Circle marks a significant milestone in the evolution of Japan’s digital currency landscape. With a focus on regulatory compliance, innovative circulation strategies, and the integration of Web3 Services, the alliance aims to usher in a new era of financial possibilities in Japan, driven by the adoption of stablecoins and cutting-edge blockchain technology.
