Mitsui, a Japanese trading house, is launching its stablecoin before its competition, DCJPY based on reports. The stablecoin is going to be linked to gold and will, apparently, beat out the other popular upcoming stablecoin – at least when it comes to who launches first.
Stablecoins can be defined as a branch of cryptocurrency concerned with countering the instability that comes with crypto coin prices and supported by a reserve. This reserve could be gold, a fiat currency, or among other things. They aim to handle the problems associated with both fiat and decentralised currencies. On one hand, stablecoins are much less predictable in value when compared to other coins like Bitcoin and altcoins. On the other hand, stablecoins offer the speed and security a trader does not get from the traditional mode of financial services. In this case, the Mitsui stablecoin is pegged to the price of gold because all stablecoins are linked to something of somewhat stable value. It could be a fiat currency – like USDT is linked to the US dollar – or even another coin. Stablecoins maintain their value thanks to backing or via trading of the value to which they are pegged.
The bear fall of Bitcoin has brought the volatility of cryptocurrencies to the spotlight, with many people interested in hoarding and trading on cryptocurrency exchange websites putting off their ideas to trade crypto these days. Crypto coins are meant to have some sort of balance or predictability to them and this is why stablecoin is so popular at the moment.
Those stumped as to what cryptocurrency is can just think of it as decentralised digital money that exists on the blockchain network and ensures privacy from the Government or Big Tech. If you then wished to withdraw your money for payment, selling your cryptocurrency or crypto coin for a legal tender that is usually in the form of fiat currency is the way to go.
Despite not necessarily being an anti-crypto nation, Japan isn’t as welcoming as some other countries such as Singapore. A few months back, it devised a way to regulate the flow of Tether or USDT in the nation. USDT is tied to the US dollar and also the Yen to some extent. The matter with China Evergrande pushed crypto coins and their lack of stability to the forefront of the discussion yet again, and Tether, when queried about that, said it did not possess any sort of commercial paper issued by Evergrande. Commercial paper from several benefactors and companies is part of what supports Tether.
The U.S talked about limiting the risk posed on everyday people engaging in cryptocurrency purchase and trade on places such as https://redot.com/ and how they plan to introduce legislation that guards stablecoin owners against financial ruin. This is meant to give stable crypto adopters some kind of insurance against any unforeseen stablecoin monetary issues that occur on the blockchain network.
Japan is targeting the banks and wire transfer services as their own way of curtailing the use of stablecoins, possibly reducing the number of people that trade crypto such as USDT by holding banks accountable since their legal obligation is securing the assets of their customers. This will make digital payments harder for crypto enthusiasts but could also reduce the risk of loss. The Japanese FSA has also toughened limitations aimed at stopping digital malefactors and even third-party middle-men like wallet providers that are related to the stablecoin online market will be scrutinised by an overseeing body.
In Japan, profits from cryptocurrency trade are not taxed the same way traditional profits are. Lent assets and traded assets are seen as one and the same in crypto mining under miscellaneous income. Nobody knows for sure how these regulations will affect cryptocurrency trade in public and private blockchains in Japan, and with the high number of aged people in the country, the vast majority still have a tendency to use the traditional market in handling their finances.
Nevertheless, digital modes of payments are being used for smaller, menial goods and services which is always an encouraging sign for crypto supporters. Companies like Rakuten might be softening up on crypto too, with Rakuten announcing that some cryptocurrencies could be used in paying for their Rakuten wallets. Also, crypto trends in Japan keep rising, with each of the last few years surpassing the one prior. As things stand, crypto and both public and private blockchain are new to many people, and it will take some getting used to from the general populace of Japan. That is why this stablecoin launch from the Japanese trading house is so important.
ZPG COIN SHALL BE USED TO MAKE DIGITAL PAYMENTS TOO
Mitsui’s plans to issue a crypto coin that is tied to gold have come as a pleasant surprise to the crypto community in Japan. The name of the coin being made public by the Japanese trading house is ZPG (ZipangCoin). Some might see it as a digital yen due to it being stablecoin, and this tends to give people more faith in the cryptocurrency – being linked to gold is another good reason. The stablecoin is set to start functioning for public use from February, 2022 with retailers getting access to y via crypto exchanges.
Gold value at mostly Yen prices – part of why it is seen as a digital yen – is what ZPG is pegged to, with a single ZPG being equal to a gram of gold. The coin is backed by Sumitomo Mitsui Banking and will start off at the trading house’s personal crypto exchange on a private blockchain then spread out to the public domain where the public can make use of it. Mitsui also opened a platform in tandem with Seven Bank Japan for cryptocurrency exchange after being approved by the nation’s FSA.
ZPG coin will try to create better ways to reduce the loss of digital capital and combat inflation. The Japanese trading house will provide new chances for profitable investment and smartphone payments that make transactions much easier.