The crypto world is currently crazy for stablecoins, with more popping up almost every week. It comes as no surprise that Japan is looking to launch its own stablecoin to allow its crypto traders to hedge against adverse market movements in their native Yen rather than using the USD. Crypto Garage – a subsidiary of Digital Garage – has finally been given the go ahead from Japanese regulators to create and test the first Yen pegged stablecoin. This is a huge move for Japan and will come as a warm welcome to Japanese crypto traders that carry an interest in stablecoins.
Teaming Up with Blockstream
For this huge project, Crypto Garage is teaming up with Blockstream in order to use its Liquid Sidechain network to execute transactions and build a new trading environment. The Liquid Sidechain network allows exchanges to connect together and swap cryptos for other cryptos between themselves much faster than previously possible – very similar to an atomic swap. By using this platform, Crypto Garage can ensure that its Japanese Yen stablecoin will be available on all Japanese crypto exchanges with high levels of liquidity.
BitGo Could Join the Party
BitGo is one of the world’s largest crypto custodial service providers, meaning it holds crypto for exchanges in secure cold wallets. It recently added support for Universal Alliance Protocol stablecoins as well as a raft of others. Depending on the protocol that the Japanese Yen stablecoin will be using, BitGo could quickly open up shop in Japan and offer its services for Yen stablecoin storage.
All Fiat Currencies Set to Get Stablecoin
Back in June 2018, Jeremy Allaire – Circle CEO – made what seemed to be a very bold prediction stating that all fiat currencies will have a stablecoin pair. While he didn’t give a date for this to happen, the vast majority of fiat currencies now have stablecoin pairs – some even have more than one stablecoin. This move in Japan pushes Allaire’s predictions to be one of the most accurate predictions to come out of 2018, and as 2019 presses on we could see a lot more stablecoins popping up.
What’s the Hype All about?
Stablecoins allow crypto holders to digitally, quickly and cost effectively swap out crypto for a fiat currency without converting back into fiat. Converting into fiat on an exchange can be rather costly, so keeping the money in crypto saves a lot on fees. Stablecoins allow crypto traders to quickly diversify their portfolio and hedge against adverse market movement, all the while saving money and time.
Japan is really pushing hard to become a crypto friendly nation, and having a stablecoin of its own will only cement this position further. After a successful rollout of the stablecoin, Japan could look at legalizing it as a form of tender – after all it is still fiat pegged. Texas is already considering legalizing stablecoin payments, so it would come as no surprise if we saw this happen in Japan later on this year.
