How Japan’s Regulatory Environment Creates Ground for Stablecoin Adoption

Transcript

Please welcome our next presenter, Miss An Chan. Please come up to the stage. >> Hello. Hi everyone. This is uh Ann. I'm partner of IBC. So um today I'm going to talk about like this Japanese um yen stable coins. How is the Japan's regulation environment create a solid ground for practical adoption? Uh so as for IVC uh if you are in the startup community so you're probably aware of IVS conference in Kyoto uh every year. So basically we run the IVS

this year I mean every year that gather like all the startup either in web two or web three together and uh on the day-to-day job we're actually a venture capital especially investing into web 3. Um on the IBC side we have invested in over like 200 projects and uh this is globally. Um and JPYC we are also the early investor into JPYC which is the first um licensed Japanese stable yen uh stable coins and beside our latest project that have been doing pretty well on the token side including like aether which is a decentralized uh AI compute power platform. Uh the ticker is ATTH. I think that the price has been going

pretty good. And also the other deals that we done lately, it's a Nakamoto. It's a Bitcoin treasury uh digital asset treasury. Uh that's run by uh David Bailey who is uh uh Mr. uh President Donald Trump's crypto advisor. And the other um project that we invested lately is a Korean entertainment companies code Titan that uh usually come out with few like K-pop store group. So uh regarding on the topic of the Japanese le like a stable coins um Japan like government has been one of the f very first like government that set up the framework and also the rules uh for the stable coins uh operational like business in Japan.

And from the year of like 2022 to 2023 uh stable coin has been categorized um officially as a uh electronic payment instruments and this all companies that's doing the stable coin business need to register under this electronic payment instrument service provider EPISP. Um and the candidates that are able to issues the stable coins um are only the three types which are the banks, the funds travel uh transfer service provider and also the trust company. Um each type of the issuer has its own like a requirement and also the license. And

even though that the banks today it's um still permitted to issue the stable coins. Um but currently most of the banks that are applying for the stable coins they are doing the fully backed like 100% tokenized like deposits. So not technically like the EPISP it's uh been required. So the change of rule this year for the stable coins uh that the Japan like FSA that introduced on the amendment of the uh the PSA which is the payment service act um some of the notable change it's um there is actually more flexibility on the reserve composition for the trust

type of the stable coin. So before they probably need to hold 100% of the deposit that's 101 back to the Japanese yen that they issue but now uh they need they can actually allocate up to 50% of the reserve to the lowrisk asset like Japanese government bonds uh that could be like a providing some yields. So the adoption rise in like a 2025 um as uh you are probably aware that JPYC which is uh we invested back in like three years ago that they recently got the license approved from the government and um also they are actually now categorizing under the fund transfer and also the trust type. Um but there

are other banks who are actually doing uh falling the category of the banks uh that could be issuing the the stable coin as well but they are usually doing the 100% like uh backed uh assets. Yeah. The but the key model difference between the Japanese stable coin and also the US which is circle that was went on IPOed uh like uh I think two month ago. Um the key difference it's um due to the low interest rate in Japan uh profitability uh that's generating from the yields on like uh stable coins uh putting as a reserve assets it's um a little bit challenging in Japan um like

what also like those Japanese like stable coin projects they are also trying to uh take some profitability and generating revenue from the carry trade but this carry trade also has been like narrow uh recently between the US and also Japan. So uh for different kind of opportunity if um projects are thinking about what kind of opportunity could be there like working with the Japanese stable coins. uh now like by the c like uh in Japan it is actually quite different than the US because Japan stable coin project actually more for the practical use case versus like the Japan peers which is such as like the circle USDT US uh USDC and also the

tether USDT is actually serving for reserve and also trading. So Japan is now working more on like the actual practical use such as serving for the merchant payments, enterprise integration, retail payments and also for the crossber remittance. Uh versus like us it's mainly serving for the tradings um and also like reserve. So if uh you are actually working in some corporates that's looking for like integrating with the uh Japan stable coins that's um I I think that there could be opportunities uh working with uh such as like JPYC or like some of the banks uh depending on the purpose and

also um th those are actually just some of the framework and also the existing uh payments that some of the existing party have been working on such as like the soft post for toa which is uh also issuing by a bank and also the eststeria no code like ERP uh adapter that's for the enterprise use astera it's like uh ERP service provider for the enterpriseg grade software software provider so uh those are just some of the use cases and also opportunity here uh probably for some of your references and uh we think that there could be like more adoption for the Japanese yen light to grow in

the future that uh we are still waiting for um the upcoming adventure. Thank you everyone. Thank you very much.