[Bank of Japan launches first deposit-backed stablecoin]

Northland Bank, a leading financial institution in Japan, recently launched a stablecoin backed by bank deposits, sparking widespread discussion among Japanese cryptocurrency enthusiasts about its potential and usefulness. This innovative initiative builds on the successful launch of the Tochituka app last year in partnership with the state government, which allows citizens to use Tochipo points at designated merchants in their local area. Bank account holders can now also top up and use Tochika stablecoin to make purchases through the app.

The launch of this stablecoin is particularly innovative in the Japanese market, where cash still dominates. Northland Bank aims to encourage retailers to participate in cashless transactions by offering transaction interest rates as low as 0.5%, and plans to bring paper gift certificate companies into the digital industry to enable peer-to-peer transactions.

Not only does Northland Bank plan to introduce in-app person-to-person payments by the end of the year, it also hopes to attract other banks in Ishikawa Prefecture to join the initiative and plan for future regional expansion. The platform’s technology was developed by Digital Platformer and uses Japanese company Soramitsu’s Hyperledger Iroha product. Compared to stablecoin initiatives by other banks around the world, Northland Bank’s initiative is unique due to its focus on retail customers and real bank deposit support.

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