Towards the full launch of stablecoins, a group of stocks that have risen rapidly due to the practical application of “digital currency” |

With the stablecoin ban lifted, expectations are rising that the Bank of Japan’s CBDC “digital yen” will be put to practical use. Companies that invest in fintech startups early may see a boost in returns.

―The balance of power in intercompany payments has completely changed, and the acceleration of discussions on a “digital yen” has led to the emergence of special needs centered on the IT and consulting industries――

With the implementation of the revised payment services law, market participants are interested in stablecoins backed by fiat currencies such as the Japanese yen and the US dollar. The biggest feature is that it can realize instant deposit and withdrawal service, and the fee is low. It is expected to expand its application in trade settlement. Digital currency (CBDC) issued by the central bank, such as “digital yen”, is accelerating its practical application. In this special stock search top feature, we’ll be picking stocks that could benefit from real-world applications for stablecoins and the digital yen.

●Domestic issued stablecoins that are not “encrypted assets”

When it comes to stablecoins, many investors may think of the storm surrounding “Terra USD”. The collapse of Terra USD (now Terra Classic USD), which once had a market cap of more than $18.5 billion, collapsed last May, leading to a series of bankruptcies among hedge funds.

Recently, on June 5 this year, the US Securities and Exchange Commission (SEC) filed a lawsuit against the largest encrypted asset (virtual currency) exchange Binance and its CEO (CEO), and the stock price plummeted for a while. Can encrypted assets with unstable price fluctuations be used for payment? It is not unreasonable to ask such a question.

However, the domestic ban on stablecoins was lifted under the revised Payment Services Law, which came into effect on June 1, and does not apply to crypto assets.

Stablecoins are broadly divided into “mortgage” types backed by assets such as fiat currencies and “non-collateralized” types that are linked to fiat currencies through financial engineering and algorithms. The scope of the revised law is the type of collateral. After distinguishing the type of fiat currency collateral from encrypted assets, it is positioned as a “digital currency-like” stable currency, which is intended to be regulated for the purpose of protecting users and preventing money laundering.

“Unsecured types” like Terra USD are positioned as encrypted assets, but from June 1, a “travel rule” will be introduced, requiring exchange companies to notify the sender and receiver of information when transferring assets, New money laundering measures will be introduced for crypto assets.

● “Progma Coin” will be issued soon

Fiat-collateralized stablecoins are characterized by low price volatility compared to crypto assets. It also has the added convenience of being able to easily exchange for different stablecoins, unlike e-money that is used for everyday purchases. After the revised law is implemented, various stablecoins are expected to be issued in Japan within the year.

MUFG Financial Group <8306> (TSE P) subsidiary Mitsubishi UFJ Trust Bank aims to issue a stablecoin “Progmacoin”. On the technical side, we have partnered with Speee <4499> (TSE S), a subsidiary of Datachain, and Soramitsu (Shibuya-ku, Tokyo), which supports the issuance of Cambodia’s CBDC, have cooperated to promote development. Once the intermediary’s license registration is completed, it can be issued and distributed.

Startup JPYC (Chiyoda-ku, Tokyo) is also reportedly planning to complete its registration as a money transfer business by the end of the year and issue stablecoins under the revised law. 2021, Asteria <3853> (TSEP) will begin investing in the company through a fund, saying it will work to promote the use of the stablecoin.

Expansion of business opportunities such as IT consulting

Stablecoins issued by private companies are considered a type of digital currency. So far, the Japanese government and the private sector have worked together to promote the practical application of digital currencies. A representative example is the Digital Currency Forum, which consists of more than 100 companies, local governments, organizations and relevant ministries.

by IT consulting firm Future <4722> Hiromi Yamaoka, director of the (TSE P) and former head of the Bank of Japan’s Financial Markets Division and Settlement Mechanisms Division, served as chair. For Future, whose performance is driven by the company’s DX (digital transformation), the practical application of digital currency will surely become a medium-term growth driver.

In the sub-committee of the forum, in the field of industrial layout and settlement, Mitsubishi Corporation<8058>(TSE P) took the lead in carrying out the demonstration experiment of biomass fuel shipping transactions. Chiyoda Ward) to issue digital currency. DeCurret Holdings, which owns the company, is Internet Initiative Japan <3774> (TSEP) equity law subsidiary. IIJ can be said to be the flagship of digital currency pioneers, and it is also likely to enjoy a first-mover advantage when the market expands.

In addition, at Tsuruha Holdings <3391> (TSE P) and Hitachi Ltd. <6501> (TSE P) participated in the demonstration experiment of using digital currency settlement in the retail and distribution industry, the system integrator TIS <3626> ( TSE P) P) Intec is a group company providing Electronic Ordering (EDI) services with a focus on positively impacting the overall performance of TIS. Sigmaxis Holdings <6088> (TSE P), a consulting firm that has been participating in the forum since the establishment of the Digital Currency Research Group, may contribute to further business expansion.

A venture capital company focusing on the implementation of CBDC

The “digital yen” is also expected to spread and expand in the future. Among emerging and developing countries, the Bahamas and Cambodia have introduced CBDCs, while China is experimenting with a digital yuan. Discussions on the system are also gathering pace in Japan.

The Bank of Japan has called for participants for a CBDC forum until April 28. It seems that the list of companies participating in the Med will not be announced in July until the Bank of Japan reviews it. Major financial and telecom companies, as well as fintech start-ups are expected to participate.

Looking at the meeting materials of the Digital Currency Subcommittee of the “Future Payment Forum” held by the Bank of Japan in the past, the names of various start-up companies have appeared. Among them, infcurion (Chiyoda-ku, Tokyo) is a financial technology company that provides payment services. In 2009, growth investment fund Minerva Growth Partners acquired GMO Internet Group <9449> (TSE P), a subsidiary of GMO Venture Partners. At the same time as the announcement, Infcurion also announced the strengthening of the Money Forward <3994> (TSE P) capital and business alliance. Infcurion’s growth could benefit these companies.

● Accrete is also a candidate for color

In addition, Intertrade <3747> (TSE S) is attracting investors’ attention as a digital currency-related stock. The company is developing a trading system for the encrypted asset Zipangu Coin, which is designed to be pegged to the price of gold.

Accrete <4395> (TSE G) announced in 2009 the investment in Digital Platformr (Chiyoda-ku, Tokyo), which provides a platform for issuing digital regional currency, is also in a situation where it contains a detonator that exerts buoyancy Force on its business performance. I can say that. App developer iRidge <3917> (TSE G) has established a foothold for business expansion, and its subsidiaries have a track record of implementing digital regional currency platforms in the Hida area of ​​Gifu Prefecture.

The stock is illiquid, but Computer Management Co., Ltd. <4491> (TSE S) has long been engaged in the development and maintenance of a payment management system compatible with the Bank of Japan’s electronic payment system “Bank of Japan Net”. If the commercialization process of CBDC accelerates, it can be said that the speculation of business expansion may work.

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