Japanese regional banks HokkokuBank and Kono Shinkin Bank are going live today with a local digital currency initiative. Initially people receiving points for community volunteer services can spend them at local stores through a blockchain powered app, Tochitsuka. However, before the end of the year HokkokuBank plans to add a deposit-backed stablecoin, Tochika . Both organizations are located in the Japanese Ishikawa prefecture.
Suzu City issues the local government points onto the app.Digital Platformer, the developer of the Tochitsuka app, signed up more than 50 retail outlets where users can redeem the points. It’s also planning to launch the solution in other regions.
Low transaction fees of just 0.5% for the soon to be release stablecoin is a key lure to sign up merchants. Digital Platformer achieves the cost savings by using blockchain to share the data between the retail outlets and bank. We believe it uses Hyperledger Iroha as a consortium blockchain. The core Iroha developer Soramitsu, is also based in Japan. Soramitsu used the Iroha technology for Cambodia’s Bakong project.
Earlier this year, QR Investments, a subsidiary of HokkokuBank, invested in Digital Platformer. The startup also provides a digital identity service.
New legislation came into force in Japan in June supporting stablecoin issuance. This is the latest of multiple stablecoin initiatives. The highest profile offering is Progmat Coin, a stablecoin platform initially developed by MUFG but now backed by several other banks. Binance is exploring using the platform for issuing trust-based stablecoins. And that’s not just for Japanese Yen. However, this is subject to Binance receiving regulatory approval.