Hokkoku Bank launches Japan’s first deposit-backed stablecoin – Ledger Insights

Hokkoku Bank launches Japan’s first deposit-backed stablecoin – Ledger Insights

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Today Japanese regional bank Hokkoku announced it is the first in Japan to launch a stablecoin backed by bank deposits. Last year it launched the Tochituka app, which allows citizens to earn Tochipo points from the local Suzu City government and spend them at certain stores. 

Now those who already have a Hokkoku bank account can use the same app to top up their Tochika – the deposit backed stablecoin – which they can spend at local stores.

Japan is still heavily cash-centric. The bank said it’s keen to attract retail businesses that have so far avoided cashless payments because they are too pricey. Instead, it is offering merchant rates of 0.5%. Other targets are companies that issue paper gift certificates and are willing to use the digital app for points.

By the end of the year Hokkoku Bank plans to enable person-to-person payments through the app. It also wants to attract other banks to join it within the Ishikawa prefecture. Expansion to other regions is the ultimate goal.

Technology partner Digital Platformer developed the platform, and we believe it uses Hyperledger Iroha, which was founded by Japan’s Soramitsu.

While other banks around the world have launched stablecoin initiatives, many don’t focus on retail customers. Other are backed by typical stablecoin reserves rather than bank deposits.

Other Japanese digital currency initiatives

In terms of stablecoins in Japan, last year, new laws came into force allowing three types of stablecoins, with bank stablecoins as one of them. Typically regulated stablecoins in other jurisdictions involve ringfencing of the reserve backing. Japan also supports this sort of digital currency as a trust-enabled stablecoin. MUFG founded the Progmat Coin platform to enable multiple stablecoin issuers to launch trust-type stablecoins with different trust banks.

In terms of deposit backing, DCJPY is a major Japanese deposit token initiative that plans to go live during the current quarter.


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