SBI VC Trade Becomes First Firm in Japan to Receive Regulatory Approval to Handle Stablecoins

The exchange plans to start processing USDC transactions on March 12. By: CoinDesk Japan. Updated: March 8, 2020 at 1:13 a.m. PDT.

SBI VC Trade, the crypto trading affiliate of Japanese conglomerate SBI Group, has become the first firm in Japan to gain regulatory approval for handling stablecoins.

The firm, which is also known as SBI Cryptocurrency Exchange, has received an “electronic payment instrument business operator” license from the Kanto Regional Financial Bureau, according to a report by CoinDesk Japan. It is registered at the financial bureau with registration number No. 00001.

After receiving the license, SBI VC Trade plans to start processing transactions for Circle-issued USD Coin (USDC) on March 12. However, the service will remain in the beta phase and the distribution will be limited to a few customers within the group.

Once the stablecoin service becomes available to the public, SBI VC Trade will be able to offer services that will enable individual and corporate customers to buy and sell, as well as deposit and withdraw USDC.

Because the stablecoin is pegged to the U.S. dollar, SBI will need to stock up on the greenback, securing an amount that is equal to or greater than the amount of USDC deposited by customers.

According to the report, Shinsei Trust Bank, a member of the SBI Group, will be responsible for the firm’s trust security. By the time of the beta launch, users will be able to see “USDC” displayed on the firm’s trading platforms. The stablecoin will be available to trade with spot trading pairs including BTC/USDC and ETH/USDC pairs.

“We will first check the business flow. We want to launch it in earnest as soon as possible,” said Tomohiko Kondo, CEO of SBI VC Trade.

At press time, SBI VC Trade is the only Japanese firm that holds all three operating licenses: a cryptocurrency exchange business license, the financial instruments business type 1 license, and theelectronic payment instruments trading business license.

Last February, the Japanese Financial Services Agency approved a report which included a proposal to introduce an "electronic money with variable exchange value." This would essentially create a legal framework for stablecoins in Japan.

The report also suggested that stablecoins could be backed by short-term government bonds and fixed-term deposits in addition to demand deposits. It also proposed an upper limit of 50% on the bonds and deposits that can be used as collateral for stabelcoins.