Circle’s USDC is the second-most popular stablecoin. But the company brands it as “the world’s largest regulated stablecoin.”
Given this emphasis on regulatory compliance, Japan’s pioneering stablecoin regulation makes the country a natural target for USDC growth, which Circle hopes to encourage through a new partnership with SBI Holdings.
In a statement on Monday, November 27, Circle announced a Memorandum of Understanding (MOU) with SBI Holdings, a Japanese financial services and technology conglomerate.
The two companies will work together to promote USDC adoption in Japan.
Yoshitaka Kitao, President and CEO of SBI Holdings, said Japan is “preparing the groundwork for the full-scale introduction of stablecoins” in the economy. He called the new partnership with Circle, “the first step toward widespread adoption of stablecoins in Japan.”
As part of the arrangement, SBI’s Shinsei Bank will provide banking services to Circle, making it easier for Japanese businesses and individuals to access USDC.
SBI Group will also adopt Circle’s other Web3 solutions, including its crypto wallet, blockchain infrastructure and smart contract management tools.
The latest agreement between Circle and SBI references Japan’s Revised Payment Services Act (PSA), which established a regulatory regime for fiat-backed stablecoins in the country this year.
By recognizing stablecoins as a valid digital payment instrument, the PSA paves the way for their mass adoption by businesses.
In addition to Circle, Japan’s pioneering regulation has also attracted the attention of other stablecoin issuers. for example, Binance is considering launching its own yen-backed token there in collaboration with the Mitsubishi Banking Group. Orix Bank is also exploring the prospect.
On the global stage, Japan has pulled ahead of other countries that have yet to pass the legislation needed to recognize stablecoins as a valid form of currency. But others could soon catch up.
In the UK, for instance, the Bank of England initiated a consultation on the matter earlier this month. The BoE has made establishing a licensing regime for stablecoins a cornerstone of its broader efforts to regulate digital assets.
Meanwhile, stablecoins are covered by the EU’s Markets in Crypto Assets (MiCA) regulation. Like Japan’s PSA, MiCA will establish strict custody and registration requirements for issuers of fiat-collateralized stablecoins.
In the US, on the other hand, House representatives initially appeared to get behind Congressman Patrick McHenry’s Clarity for Payment Stablecoins Act. However, in the end, bipartisan disagreements prevented the Bill from reaching the floor.
According to McHenry, “a bipartisan deal was within reach” but was ultimately scuppered by the White House, which he said was unwilling to compromise.