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28/05/24
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Nomura Holdings Forms Partnership Focusing on Issuance of JPY and USD Stablecoins in Japan
Nomura Holdings and the GMO Internet Group have become partners with a focus on the issuance of JPY and USD stablecoins in Japan. Laser Digital Holdings is also included in the partnership as it provides trading solutions and asset management for digital assets.
Specifically, they are focused on issuing traditional stablecoin and regulatory compliance as well as stablecoins-as-a-service. Nomura Holdings CEO Kentaro Okuda believes that stablecoins “will inevitably play an important part in financial markets”, as expressed in a press statement after the announcement.
Okuda said they look forward to exploring the issuing, redeeming, and circulating mechanisms of a JPY/USD stablecoin business in Japan. “This project has the potential to greatly enhance digital asset accessibility and innovation in the Japanese financial landscape,” said Okuda.
Two years ago, the Japanese authorities came up with a law to establish a solid and clear regulatory framework to govern stablecoins. The bill considers stablecoins non-securities, with stablecoin issuers required to register with the Financial Services Agency (FSA) prior to issuing the tokenized fiat equivalents.
Entities allowed to issue stablecoins in the country under current laws include trusts, banking institutions, and money transmitters. However, the stablecoin’s value is required to be pegged to an underlying fiat currency like JPY or USD.
The FSA has been scrutinizing algorithmic stablecoins after the huge failure of TerraUSD, with the financial regulator issuing warnings regarding the risks, noting that stablecoins backed by actual fiat reserves are preferable. TerraUSD’s collapse in 2022 caused regulators to question the integrity of algorithmic stablecoins, as it did not have actual fiat reserves for backup during extreme market volatility.
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