Three Japanese banks are set to conduct a stablecoin experiment using a payment system that complies with legal requirements.

Tokyo Kiraboshi Financial Group, The Shikoku Bank, and Minna no Bank plan to issue and remit stablecoin-type electronic money on Japan Open Chain through a system developed by Web3 infrastructure company GU Technologies.

The banks intend to promote stablecoins for general consumer use and business-to-business remittances through demonstration experiments involving local governments and private companies. They also plan to issue their own stablecoins that can be used in Ethereum wallets like MetaMask while complying with Japan's new fund settlement laws.

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The use cases for the stablecoin experiment include community currencies and Web3-enabled payment methods, as well as new remittance and payment methods between individuals and companies in Japan and abroad.

This could potentially replace the services provided by Zengin Net and SWIFT Network in the space.

The banks expect the stablecoin scheme to benefit issuers and users alike.

Issuers stand to gain from increased revenue from settlement and exchange fees, as well as new payment data opportunities.

They could also see increased investment profits due to more bank deposit accounts.

Meanwhile, users could benefit from significantly reduced settlement and remittance fees, seamless support for foreign currency payments, including USD-pegged stablecoins, and the ability to use assets as a means of exchange for other digital assets like NFTs.

"We will experiment to ensure that each bank can issue its own stablecoin that can be used in Ethereum wallets such as MetaMask while complying with Japan’s new fund settlement laws," a press release issued on Thursday stated.

 It also noted that a tried-and-tested financial institution stablecoin issuance system would ensure asset-backing on the Japan Open Chain, which is fully compatible with the Ethereum (CRYPTO: ETH) blockchain.

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