Japanese traders will soon have access to Circle’s USDC Stablecoin, which gives them an easy option to keep the US Dollar-Denominated Balances. It is a first for the Japanese market, where local regulatory authorities have hesitated to bring Stablecoin trading to the masses.
The country’s strictly regulated digital asset exchanges Generally do not support (or cannot) USD Stablecoins. Therefore, the SBI VC Trade movement can facilitate JPY/USD exchanges and have interesting effects on the broader currency trading world and the Japanese economy.
JPY is the world’s third most traded Fiat currency after USD and euro and is known to be popular with “wearing traders” -ie, traders who borrow JPY to Japan’s very low interest rates and invest them in foreign markets.
According to Swift it is also among the top five for all cross -border payments. The ability to move USD value to Japan and trading it for local Fiat currency without using the banking system (or paying their fees) can also be valuable. The same would go for USDC moving out of Japan.
Easier access to USDC can also act as a ramp to Decentralized funding (Defi) World for Japanese traders. The country’s digital asset trading market is one of the world’s largest and defi trading is said to be worth over $ 100 billion. With the help of USDC, a favored access to the Defi markets, Japanese traders would suddenly have great access to liquidity pools.
Why haven’t Japanese traders had access to USDC before?
SBI VC Trade parent company, SBI Holdings (Nasdaq: SBHGF), has been collaborating with Circle to support USDC in Japan since 2023. But to list and trade access, SBI VC needed to receive additional licensing that Japan requires for companies that trade in offshore-based Stablecoins.
Japan and its supervisory authority, Financial Services Agency (FSA), have designated Stablecoins for attention. All cross-border Stablecoin transactions are facing more review than those involving other digital assets. Specifically, such a transaction must be traceable to a legal name and housing address.
This would be difficult to polish in transactions involving stablecoins between two non-caregivers WalletsBut if any of these assets land in a Japan-based exchange, their owners’ identity would be known.
USDC and Tether (USDT)
USDC, which has been around since 2018 and has a market value of approximately $ 56.4 billion, is the world’s most used USD-peggled digital asset after Tether (USDT). But clutch still have the largest part of Stablecoin trading liquidityThanks to its four -year lead, USDC has acquired its part of that market by focusing on openness and compliance with international regulatory authorities.
Both have maintained their $ 1 sticks quite consistently over the years. This has not been without temporary problems, but users still trust them enough (for now) to park USD-denominated trade value in these assets in times of high volatility or uncertainty in the price. USDC and USDT both use multiple blockchains to tokenize their assetsMainly Ethereum and Solana, but also on networks such as Algorand, Polkadot and Avalanche.
USDT is not available on Japanese exchanges and will probably not be available soon.
USDC, the product of a partnership between Circle and Coinbase (Nasdaq: Coins), have tried to beat Tether on the biggest weak points: Lack of supervisory surveillance and its dislike to prove their reserves of support resources. Stablecoins maintains their clapped values not through speculation but through invisible reserves of “actual” assets (RWAS) with the corresponding Fiat value to their total supply.
Although they are never specified and reviewed, Tether includes support reserves reportedly cash, corporate bonds, bitcoin, secured loans and precious metals. The USDC is regulated according to US Law and supports its value with USD cash and short-term US treasury.
See: History of Bitcoin with Kurt Wuckert Jr.
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