Hokkoku Bank Launches Japan's First Bank-Backed Stablecoin, 'Tochika'

Hokkoku Bank has introduced "Tochika," Japan's first bank deposit-backed stablecoin. Through its Tochituka app, users can top up their stablecoins directly from their bank accounts and make payments at participating merchants. The bank aims to expand merchant acceptance and lower processing fees to promote digital payments in a cash-centric society like Japan.

Hokkoku Bank Introduces Japan's First Bank-Backed Stablecoin

Ishikawa, Japan – February 14, 2023 – Hokkoku Bank, a regional financial institution headquartered in the Ishikawa prefecture of Japan, has announced the launch of Tochika, a groundbreaking stablecoin backed by bank deposits. This development marks a significant milestone in the convergence of traditional finance and blockchain technology in Japan.

Seamless Integration with Digital Payments

Tochika is designed to be seamlessly integrated with Hokkoku Bank's existing digital payments mobile application. Users can effortlessly fund their Tochika wallets directly from their bank accounts, enabling them to make payments at participating local merchant stores using the stablecoin.

Efforts to Expand Merchant Adoption

Hokkoku Bank is actively engaged in onboarding a growing number of merchants to support Tochika payments. To incentivize adoption, the bank has implemented a competitive processing fee structure, lowering it to a mere 0.5%.

Addressing Japan's Cash-Centric Culture

Japan remains a predominantly cash-based society, with digital payment solutions facing challenges in gaining widespread acceptance. Hokkoku Bank aims to address this by leveraging the convenience and stability of Tochika to encourage merchants and consumers to embrace digital transactions.

Tochituka App as a Platform for Growth

Hokkoku Bank's Tochituka app, launched in September 2023 through a partnership with Kono Shinkin Bank, serves as the backbone for Tochika payments. The app initially allowed users to convert community volunteer points into digital payments accepted at participating stores.

Targeting the Gift Card Market

Beyond merchant payments, Hokkoku Bank recognizes the substantial market size of gift certificates in Japan, estimated to reach $29.7 billion by 2028. The bank sees potential to provide digital gift card solutions to issuers currently relying on paper certificates.

Hokkoku Bank's Blockchain Infrastructure

Hokkoku Bank is reportedly leveraging the Hyperledger Iroha network to support its stablecoin operations, demonstrating the bank's commitment to industry-leading blockchain technology.

Growing Popularity of Tokenized Deposits

Tokenized deposits are gaining traction globally as a bridge between traditional banking and blockchain-powered stablecoins. The Bank for International Settlements (BIS) has acknowledged their potential to enhance the "singleness of money."

Global Initiatives in Tokenized Deposits

Various monetary authorities and commercial banks worldwide are exploring tokenized deposit projects. In South Korea, the central bank is collaborating with LG, while in Australia, regulators view tokenized deposits as the future of the financial system.

Citibank's Tokenization Initiative

In the United States, Citibank launched Citi Token Services in September 2023. This service enables clients to convert deposits into digital tokens on the blockchain, facilitating 24/7 transfers at reduced costs. However, this offering is currently limited to the bank's most affluent customers.

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