Earlier today, SBI Holdings, Inc. announced a strategic partnership with Circle Internet Financial.
SBI Holdings is a significant financial services company based in Tokyo, Japan, and led by Yoshitaka Kitao. Established in 1999, it has grown into a large conglomerate with a diverse range of financial services, including banking, asset management, brokerage, and insurance. SBI Holdings is particularly known for its involvement in the fintech and blockchain industries. The company has made significant investments in these sectors, recognizing the potential of emerging technologies to transform traditional financial services.
SBI Holdings and Ripple have a strong business relationship, particularly in the development and promotion of Ripple’s blockchain-based payment technology in Asia. SBI Ripple Asia, a joint venture between SBI Holdings and Ripple, was established to promote the use of Ripple’s technology in Asian markets. This venture focuses on facilitating cross-border payment solutions and other financial services using blockchain technology.
Circle Internet Financial, commonly known as Circle, is a global fintech firm that focuses on providing blockchain-based financial services. Founded in 2013, Circle is particularly known for its role in the cryptocurrency space. One of its most notable contributions is the co-creation of USD Coin (USDC), a stablecoin cryptocurrency whose value is pegged to the US dollar. Circle’s services include payment platforms, investment products, and financial infrastructure solutions. The company aims to facilitate the integration of digital currencies into the global financial system, emphasizing security, compliance, and ease of use.
This collaboration between SBI Holdings and Circle aims to integrate USDC, the world’s leading regulated stablecoin, into Japan’s financial ecosystem, alongside the promotion of Circle’s Web3 services.
According to Circle’s press release, the Japanese government, recognizing the potential of digital assets, revised the Payment Services Act on 3 June 2023. This amendment paves the way for the regulated issuance and circulation of stablecoins, marking a significant step towards Japan’s transition into a Web3 economy. The Act specifically mandates that stablecoins be collateralized and backed by legal tender.
Circle says that USDC exceeds these requirements, being backed entirely by highly liquid cash and cash-equivalent assets, with a 1:1 redeemability for U.S. dollars. As of 17 November 2023, USDC has seen over $12.7 trillion in on-chain transactions.
The memorandum of understanding (MOU) signed by SBI Holdings and Circle lays the groundwork for their joint efforts. Initially, the focus will be on circulating USDC in Japan and expanding the use of stablecoins. Both entities are committed to adhering to stablecoin-related regulations and maintaining open communication with authorities. SBI VC Trade Co., Ltd., a subsidiary of SBI Holdings, is seeking registration as an electronic payment instruments service to facilitate the circulation of USDC in Japan.
SBI Shinsei Bank, Limited, another SBI entity, will provide banking services to Circle, enhancing USDC’s accessibility and liquidity for Japanese businesses and consumers. Additionally, SBI Group plans to integrate Circle’s Web3 Services, including programmable wallets, blockchain infrastructure, and smart contract management tools, into its digital asset strategy.
Jeremy Allaire, CEO and co-founder of Circle, expressed enthusiasm about the partnership, viewing it as a significant step in Circle’s expansion in Japan and the Asia Pacific. He emphasized the shared vision for the future of digital currency between the two companies.
Yoshitaka Kitao of SBI Holdings highlighted Japan’s readiness for stablecoins, as evidenced by the revised Payment Services Act. He expressed satisfaction with the alliance with Circle, noting USDC’s global usage and market capitalization. Kitao reaffirmed SBI Group’s commitment to exploring new financial possibilities using stablecoins.
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