Stablecoin issuer Circle Internet Financial has entered into a pact with SBI Holdings to circulate the USDC token ¡ª a type of cryptocurrency pegged to the U.S. dollar ¡ª in Japan, which is vying with the likes of Singapore and Hong Kong to develop a digital-asset hub.
SBI Holdings, a venture capital group and financial services provider, will also work with Circle on establishing a banking relationship and promoting the use of Circle¡¯s Web3 services in Japan, according to a statement on Monday. Web3 refers to a vision of the internet built around crypto and blockchain technology.
Circle¡¯s co-founder, Jeremy Allaire, said the memorandum of understanding signed between the two companies was a ¡°significant milestone in Circle¡¯s expansion plans in Japan and Asia-Pacific.¡±
SBI Holdings¡¯ Tokyo-based chief executive officer, Yoshitaka Kitao, added that Japan was ¡°steadily preparing the groundwork for the full-scale introduction of stablecoins.¡±
Stablecoins, key parts of the crypto market, are typically pegged 1-1 to major currencies and backed by reserves such as cash and bonds. Some have veered from their pegs, prompting regulators to step up scrutiny of the risks they may pose. The tokens are used to park funds between trades and can be lent out to earn interest, with about $129 billion (?19.1 trillion) in circulation overall, data from cryptocurrency data aggregator CoinGecko shows.
Competition for stablecoin business is intensifying in Asia. Japan¡¯s stablecoin law ¡ª one of the first among major economies ¡ª became operative in June. Singapore recently awarded a batch of in-principle license approvals to stablecoin issuers. In Hong Kong, a dedicated rulebook is due by next year.
The stablecoin market is dominated by Tether Holdings, which has $89 billion worth of tokens in circulation, followed in second spot by Circle¡¯s USDC, or USD Coin, at $25 billion.
SBI Shinsei Bank will provide banking services to Circle, enabling USDC access and liquidity for Japan-based users, according to Monday¡¯s statement.
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