SBI Group Completes Registration as Electronic Payment Service Provider, Becomes First Company in Japan Authorized to Process Stablecoin Transactions

Japanese financial powerhouse SBI has completed its registration as an Electronic Payment Service Provider, making it the first company in Japan authorized to process stablecoin transactions.

Japanese financial services behemoth SBI has completed its registration as an Electronic Payment Service Provider, becoming the first company in Japan authorized to process stablecoin transactions.

Key Takeaways

* SBI has completed its registration as an Electronic Payment Service Provider.

* The company is now authorized to process stablecoin transactions.

* It will launch a beta version of its USD Coin transaction services on March 12.

* The approval allows SBI to handle transactions in USDC.

* To comply with regulations, the firm must hold an equivalent amount of U.S. dollars in reserve for every USDC deposited by customers.

SBI Plans to Offer USDC Transaction Services in Beta

Announcing the latest development, SBI Group's digital asset division, SBI VC Trade, said that it will launch a beta version of its USDC transaction services on March 12, following the regulatory green light.

"We aim to further expedite the full-scale introduction of USDC handling," the company added.

The approval now enables SBI VC Trade to offer buying, selling, depositing, and withdrawing services for USD Coin, the second-largest stablecoin by market capitalization, to both retail and institutional clients.

To ensure compliance, the firm must maintain an equivalent amount of U.S. dollars in a segregated account for every USDC deposited by customers, the company explained.

These funds will be held in custody by Shinsei Trust Bank, an SBI Group subsidiary, it noted.

With this latest addition, SBI VC Trade now holds three financial licenses, including Moneyless Payment Service Provider, Type I Financial Instruments Business Operator, and Type II Preferred Handling Financial Instruments Business Operator.

Japan's Latest Move on Stablecoins

After years of imposing strict limits on cryptocurrencies, Japan is slowly opening up to stablecoins.

Earlier this year, regulators set a 1 million yen ($6,600) transaction cap for overseas-issued stablecoins, showcasing a cautious yet evolving approach to the emerging asset class.

The move follows recent amendments to Japan's Stablecoin Act , which now permit stablecoins backed by fixed-term deposits and short-term government bonds. A 50% limit has also been imposed on the portion of stablecoin collateral that can be held in bonds and deposits.

The country's latest regulatory steps are part of broader efforts to modernize its crypto policies.

In December 2022, Japan's ruling party, which campaigned on promises to ease crypto regulations, floated proposals to lift restrictions on Bitcoin exchange-traded funds (ETFs).

SBI's new regulatory status puts it at the forefront of Japan's stablecoin expansion, which could pave the way for broader adoption of digital assets in the country.