Circle, the issuer of USDC, would be looking to launch a stablecoin in Japan

Jeremy Allaire Circle CEO
  • Circle is interested in issuing a stablecoin in Japan
  • The CEO revealed the intentions and praised the country’s latest regulatory efforts
  • Japan’s new rules for stablecoins came into effect in June 2023
  • USDC issuer also targets other Asian markets and Europe

Circle, the company behind the second largest stablecoin by market capitalization, USDC, is weighing issuing a stablecoin in Japan in the face of the country’s progressive new regulations.

The CEO of the payment company, Jeremy Allaire, announced this in a recent interview for CoinDesk Japan, in which he spoke about the company’s interest in entering the Japanese market and expansion plans into other markets. Regarding the potential of stablecoin adoption in Japan, he noted:

Japan has a long history of cross-border trade, foreign currency transactions, and global trade. If stablecoins are used more widely for such purposes, we believe that Japan will become an extremely large market .

New stablecoin regulation in Japan

Allaire referred to the country’s stablecoin regulation, which went into effect last month, which establishes a framework for the nation’s use of such assets, whether they are pegged to the yen or foreign fiat currencies.

The regulation, approved by parliament in June 2022, certifies stablecoins backed by legal tender as an “ electronic payment method ” and allows their issuance, though only by licensed banks, registered money transfer agents and trust companies.

The new law leaves behind a ban on foreign stablecoins in Japan, and sets strict rules for issuers; including compliance with standards to guarantee holders the right to exchange them for their nominal value at all times. 

“ Not many countries have done this and I consider it the most important thing the government and the [Financial Services Agency (FSA)] have done,” Allaire said, praising the effort by Japanese regulators.

The Circle boss did not provide further details about the possible issuance of a stablecoin, but did say that it is interested in expanding into Japan, either with the offer of its flagship product USDC, pegged to the US dollar, or with a new token pegged to the yen. Japanese.

Of course, we are carefully considering the new rules and how the USDC will be used in the Japanese market,” the CEO commented, acknowledging that the company would need a local license for such purposes. “Yen-pegged stablecoins will be a new opportunity,” he added after recalling that Circle offers several stablecoins, including one pegged to the euro.

Circle has an interest in the Japanese market

Allaire also spoke about Circle‘s broader expansion possibilities in Japan and the rest of the Asian region. He said the company is interested in partnerships in the world’s third-largest economy and plans to bring its innovative ‘Circle Web3 Service‘ to the country that seeks to make it easier for developers to transition to Web3.

We want to offer it to our Japanese customers, and it will soon be available to developers around the world,” he commented on the development. “In my opinion, Japan could be one of the most dynamic markets in the world for Web3 technology. Having strong government support means that companies and developers can be proactive,” he continued.

I think Japan could be a very attractive market for Circle. 

Circle‘s plans to strengthen its presence in Japan come as other local financial institutions are also showing interest in digital currencies, as noted by The BlockMitsubishi UFJ Financial Group, Japan’s largest bank, outlined plans in June to launch its Progmat Coin platform that aims to enable stablecoin issuance and trading. 

Demand for stablecoins and expansion efforts

Turning to other markets, the director noted that overall, there are strong “ demand and use cases ” for stablecoins in European markets, pointing to Singapore and Hong Kong as two expansion markets for such assets.

Allaire suggested that the growing demand is coupled with the new progressive regulations and anticipated in this sense that it is possible that interest in stablecoins in other markets such as Europe will also grow “ once the new regulation is established”. The European Union recently published MiCA, its comprehensive standards framework for crypto, which will go into effect in 2024.

Circle recently obtained a Principal Payment Institution (MPI) license in Singapore, allowing it to offer digital payment token services, cross-border money transfer services, and domestic money transfer services in the city-state, as recalled by the CEO in the interview. 

The USDC issuer filed separate applications in France in March to become a licensed electronic money institution and a registered digital asset service provider as part of its expansion effort in Europe and is now closely watching regulatory developments in Hong Kong with a view to entering that territory.