tl;dr
Hokkoku Bank has introduced Tochika, Japan's first stablecoin backed by bank deposits, enabling users to make payments at local merchant stores through its digital payments mobile app. With reduced processing fees and plans to expand merchant partnerships, the bank is leveraging the Hyperledger Iroh...
Hokkoku Bank has introduced Tochika, Japan's first stablecoin backed by bank deposits, enabling users to make payments at local merchant stores through its digital payments mobile app. With reduced processing fees and plans to expand merchant partnerships, the bank is leveraging the Hyperledger Iroha network to offer a better digital experience for gift certificates and tap into the growing trend of tokenized deposits globally, aligning with similar initiatives in countries like South Korea, Australia, and the U.S.
Hokkoku Bank has launched a stablecoin called Tochika, backed by bank deposits, marking the first of its kind in Japan. The regional bank, headquartered in the Ishikawa prefecture, allows users to top up the stablecoin, Tochika, through their digital payments mobile app directly from their bank accounts. Users can then utilize the stablecoin for payments at local merchant stores. The bank is actively working on expanding its merchant partnerships and has significantly decreased its processing fees to 0.5%. In contrast to the global trend of digital payment solutions gaining traction, Japan remains a cash-centric society, with digital payment adoption posing challenges, even amidst significant progress worldwide. For instance, neighboring China has implemented measures to penalize those unwilling to accept cash payments. Hokkoku Bank aims to drive stablecoin payments through its Tochika app, launched in September 2023 as an outcome of a digital currency initiative collaboration with Kono Shinkin Bank. Through this app, users receiving community volunteer points can make payments at participating merchant stores. In addition to merchant payments, the bank is targeting the gift card market, which holds a substantial market size in Japan, estimated to reach $29.7 billion by 2028. A significant portion of gift certificate issuers in Japan still relies on paper-based certificates, presenting Hokkoku with an opportunity to offer a more enhanced digital experience. Hokkoku Bank is reportedly building on the Hyperledger Iroha network. Tokenized deposits have been gaining prominence as an intermediary solution between traditional financial systems and blockchain-based stablecoins. The Bank for International Settlements (BIS) has endorsed tokenized deposits as more aligned with the principles of currency uniformity. Monetary authorities and financial institutions globally have initiated tokenized deposit projects, ranging from South Korea, where the central bank is collaborating with LG, to Australia, where the premier financial regulator anticipates it to be the future of money. In the U.S., Citibank launched the Citi Token Services in September, enabling the conversion of client deposits into digital tokens on the blockchain, facilitating cost-effective 24/7 transfers. This service is exclusively available to Citi's affluent clients.
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