Circle and SBI Holdings Sign MoU to Increase USDC Adoption in Japan

Jimmy Aki
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USDC stablecoin maker and issuer Circle has signed a memorandum of understanding (MoU) with SoftBank’s subsidiary SBI Holdings.

Expansion Into Asia

Making the announcement on its official X (formerly Twitter) handle, Circle stated that it is partnering with SBI Holdings to increase the adoption of its USDC stablecoin in Japan.

This, it noted, signifies a milestone leap in digital asset innovation and strategic expansion for USDC in the Asian region. The announcement was made public on November 27, 2023, marking growing confidence in favorable regulatory oversight for digital assets in the continent.

In its press release, Circle provided insights into this decision, highlighting the Japanese government’s amended Payment Services Act on June 3, 2023. This regulatory update, focused on stabilizing stablecoins, served as the foundation for the need to increase issuance of the world’s largest regulated stablecoin in the region.

Commenting on the singular historic event, Circle CEO Jeremy Allaire mentioned that the partnership represents a shared vision for the future of digital currency. Given this, SBI Holdings fits into Circle’s plans to add Japan and Asia Pacific into its running portfolio outline for its stablecoin services.

To ensure the partnership works out for both parties, SBI Holdings is expected to begin registration as an electronic payment instruments service provider with the relevant Japanese authorities.

SBI Holdings’ subsidiary firm, SBI Shinsei Bank, will also provide banking services for the USDC stablecoin maker, providing the needed wiggle room to boost their relevance further in the booming Web3 economy.

The SBI Holdings Group will also integrate Circle’s Web3 solutions, such as Programmable Wallet, blockchain infrastructure, and smart contract management tools.

Globally ranked as the second largest stablecoin maker behind close rival Tether, Circle is experiencing rapid growth and massive adoption across the Web3 landscape.

Jeremy Allaire pointed out in an August tweet that 70% of USDC adoption is outside its US home base. Allaire revealed that massive demand for safe, transparent digital dollars is stemming from Asia, Latin America, and Africa.

This followed a transparency report released a few days earlier which showed that the USDC stablecoin held 93% of its portfolio in short-dated US Treasury debts, overnight US Treasury repurchase agreements, and cash.

Circle Introduces Bridged USDC Standards

While Circle is seeking expansion into Asia, the stablecoin maker has also created a mechanism for enabling easy bridging of the tokenized dollar.

On November 21, USDC announced that Ethereum Virtual Machine (EVM) compatible blockchains and rollup teams will now be able to deploy USDC bridged token smart contracts to kickstart nascent blockchain protocols in need of liquidity.

This is expected to address issues around liquidity fragmentation across the fast-growing USDC ecosystem and provide a more robust avenue to access the stablecoin.

In addition, the bridged USDC stablecoins will play an unofficial role in generating much-needed liquidity.

Once enough liquidity is available on any EVM-participating sidechain, the development team and Circle will officially integrate and onboard it as a regular USDC stablecoin.

This will be done using the token burn mechanism, where a digital asset is permanently removed from circulation.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.