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Japan’s Sony Bank Experiments with Issuing Stablecoin Pegged to Yen on Polygon

Hassan Shittu
Last updated: | 2 min read
Japan's Sony Bank Experiments with Issuing Stablecoin Pegged to Yen on Polygon

Sony Bank, the financial arm of the renowned Japanese gaming and entertainment conglomerate, Sony Group, has embarked on a proof-of-concept endeavor to introduce its stablecoin, pegged to fiat currency like Yen, as per a Nikkei report. 

The bank says it is experimenting with the possibility of issuing its yen-backed stablecoin as a form of payment for businesses that use intellectual property owned by the Sony Group.

Sony Ventures into Stablecoins on Polygon Blockchain, Collaborating with SettleMint

In a recent development reported by local media outlet Nikkei on April 4, Sony Bank has initiated a trial phase on the Polygon blockchain in collaboration with SettleMint, a blockchain firm based in Belgium.

The trial involves Sony Bank experimenting with the issuance of a “stablecoin” tied to legal currencies like the yen. This stablecoin is designed to offer stability by being backed by real-world assets, thereby preventing major price fluctuations commonly seen in cryptocurrencies.

The purpose of this trial is to explore the feasibility of using stablecoins as a payment method within businesses related to Sony Group’s intellectual property, such as gaming and sports. By leveraging stablecoins, Sony Bank aims to reduce transaction fees for individuals and streamline payment processes.

The Sony Group is making significant strides in embracing Web3 technologies as it collaborates with Startale Labs, a leading developer of Astar Network, to establish its own public blockchain network. Startale CEO Sota Watanabe revealed that the project has transitioned into the execution phase after a year and a half of development.

This partnership underscores Sony’s commitment to driving innovation and creating a global infrastructure that supports the Web3 era. Watanabe emphasized the importance of collaborating with existing assets to onboard billions of users into Web3, highlighting the potential for widespread adoption and integration of blockchain technology into various industries.

Japan’s Emergence in Stablecoin Adoption and Sony’s Blockchain Ventures

Japan’s regulatory framework concerning stablecoins, established to ensure user protection following the TerraUSD collapse, was enacted in June last year. The regulations mandate that local stablecoins be pegged to the yen or another fiat currency, with holders able to redeem them at face value.

Subsequently, crypto and finance entities have begun exploring the issuance of stablecoins in the world’s fourth-largest economy. Last September, Binance Japan collaborated with local banking institution MUFG to explore fiat-pegged stablecoin issuance.

In November, USDC issuer Circle partnered with Japanese banking behemoth SBI Holdings to explore the circulation of USDC, the world’s second-largest stablecoin, in Japan.

This week, Hokkoku, a regional bank in Japan, unveiled the country’s inaugural bank deposit-backed stablecoin, Tochika. The stablecoin is slated for designated retail outlets within Suzu City, Ishikawa prefecture.

In parallel with these efforts, Sony Bank, the online banking subsidiary of Sony Group, made two notable blockchain-related announcements in March. Firstly, it revealed plans to launch the Sony Bank CONNECT app during the summer season. This app will provide users access to NFTs and other Web3 entertainment rewards that are seamlessly integrated with Sony Bank’s financial services.

Additionally, Sony Bank unveiled a US dollar green finance security token tailored explicitly for the Japanese market. The security tokens will be issued on the Securitize private blockchain platform, based on a trust created by Sumitomo Mitsui Trust Bank (SuMi TRUST). Investors who buy the security tokens may also receive NFTs.