JCB taps Circle for USDC stablecoin trial, because yen just can't keep up with the blockchain 🪙

JCB, Japan's largest domestic payment network, has signed a memorandum of understanding with Circle to explore USDC for cross-border payments and merchant transactions, the companies announced. Under the agreement, the firms will initially test USDC for JCB's internal cross-border fund transfers through a proof of concept, while evaluating stablecoin payments at merchants in Japan for international visitors. The companies will also assess technologies supporting interoperability across multiple blockchain networks.

The agreement builds on a separate initiative JCB launched in January with Digital Garage and Resona Holdings to test stablecoin payments at physical stores in Japan, which is focused on identifying technical and operational challenges for domestic merchant adoption. Beyond the initial proof of concept, JCB and Circle said they will evaluate additional applications for stablecoin infrastructure aimed at cross-border payments and merchant services, though they did not provide a timeline for commercial deployment.

USDC is the world's second-largest stablecoin by market capitalization, with a circulating supply of about $73 billion, behind Tether's USDT at roughly $184 billion, according to DefiLlama data. The agreement adds to a series of stablecoin payment initiatives announced in Japan this year as companies test blockchain-based payment and settlement systems.

In June, Circle and Japan's largest investment bank, Nomura, were reported to be developing a stablecoin-based foreign exchange settlement service for Japanese companies, allowing businesses to convert yen into USDC for cross-border transactions and near-instant settlement. On Monday, convenience store operator Lawson announced plans to test yen-denominated stablecoin payments at a Tokyo location beginning in August, while Japanese payments company Netstars launched a merchant payment service supporting USDC, USDT and JPYC across the Solana and Polygon blockchains.

Japan was among the first major economies to establish a legal framework for stablecoins, allowing banks, trust companies and licensed money transfer providers to issue fiat-backed tokens under amendments to the Payment Services Act that took effect in 2023. In June, the Lower House passed a bill that would classify crypto assets as financial instruments, potentially opening the door to crypto exchange-traded funds and bringing the sector under stricter market rules.