Japan’s largest domestic payment network, JCB, has entered a memorandum of understanding with Circle to explore the use of USDC for cross-border payments and merchant transactions. The initiative will begin with a joint proof of concept focusing on internal cross-border fund transfers using USDC, as well as testing stablecoin payments at Japanese merchants catering to international visitors.
Stablecoin pilot and interoperability
The two companies plan to assess the technology required to support stablecoin transactions on JCB’s networks, including interoperability across multiple blockchain ecosystems. In addition to serving JCB’s internal cross-border needs, the proof of concept will also evaluate the practicalities of enabling stablecoin-based payments at brick-and-mortar merchants in Japan.
JCB and Circle emphasized a goal of developing new applications for stablecoin infrastructure in cross-border payments and merchant services, though specifics regarding commercial rollout remain unannounced.
JCB, established in 1961, is a leading Japanese payment brand widely accepted across Asia, with a large domestic merchant network and a presence in over 190 countries and territories.
Circle, which issues USDC, is a global financial technology firm specializing in digital currency solutions for payments and treasury operations. The company’s stablecoin, USDC, ranks as the world’s second-largest stablecoin, with a circulating supply of approximately $73 billion, according to DefiLlama data. Tether’s USDT leads the market with a circulating supply of about $184 billion.
| Stablecoin | Circulating supply | Issuer |
|---|---|---|
| USDT | $184 billion | Tether |
| USDC | $73 billion | Circle |
Expanding stablecoin payments in Japan
The Circle partnership follows a separate JCB initiative with Digital Garage and Resona Holdings, launched in January, to trial stablecoin payments at physical stores in Japan. That effort is aimed at identifying both technical and operational challenges as stablecoin technology enters daily commerce.
Additionally, Japan’s stablecoin payment pilots have gathered momentum in 2024. In June, Circle and Nomura, the country’s largest investment bank, were reported to be working on a stablecoin-based foreign exchange settlement service. This service would enable Japanese companies to convert yen into USDC for cross-border transactions with near-instant settlement.
Japanese retail and payments firms are also moving forward. On Monday, Lawson announced plans to pilot yen-based stablecoin payments at a Tokyo store starting in August. Meanwhile, payments firm Netstars launched a merchant payment service supporting USDC, USDT, and JPYC, distributed across the Solana and Polygon blockchains.
Mini dictionary: Netstars – A Japanese payments company offering payment gateway and merchant payment solutions, enabling transaction support for both traditional and digital currencies.
Japan’s regulatory and digital asset landscape
Japan has played a pioneering role in stablecoin regulation. The country created a legal framework allowing banks, trust companies, and licensed money transfer providers to issue fiat-backed tokens. Amendments to the Payment Services Act, which took effect in 2023, underpin this framework.
The country continues to advance broader digital asset reforms. In June, Japan’s Lower House passed legislation that classifies crypto assets as financial instruments. This reclassification opens the potential for crypto exchange-traded funds and could bring Japan’s crypto sector in line with stricter market regulations facing traditional financial instruments.
