In a strategic move to expand its global footprint, stablecoin issuer Circle has forged a partnership with SBI Group, a prominent Japanese financial services conglomerate. The collaboration aims to drive the adoption of the USDC stablecoin in Japan, leveraging SBI’s influence and fostering the use of Circle’s Web3 Services in the country.

Circle’s Thrust into Japan
Circle’s latest venture into Japan, announced on Nov. 27, is a testament to its commitment to global expansion. Beyond promoting the use of the USDC stablecoin, Circle seeks to establish a banking presence in Japan. This move comes approximately six months after the Japanese government revised the Payment Services Act in June, laying the groundwork for regulating stablecoins.

The revised Payment Services Act specifically addresses “collateralized” stablecoins, backed by legal tender, aiming to stimulate their issuance and circulation in Japan. Circle emphasizes that USDC is fully backed by highly liquid cash and cash-equivalent assets, aligning with the regulatory framework.

The memorandum of understanding (MOU) between SBI Group and Circle outlines their initial focus on facilitating the circulation of USDC. SBI VC Trade is actively pursuing registration as an electronic payment instruments service, a crucial step pending approval.

Circle’s Web3 Services Integration
In addition to driving stablecoin adoption, SBI Group is set to integrate Circle’s Web3 Services solutions into its ecosystem. This includes the implementation of Programmable Wallet, blockchain infrastructure, and smart contract management tools. The collaboration seeks to harness the potential of blockchain technology beyond stablecoins, fostering a comprehensive partnership.

Jeremy Allaire, CEO, and co-founder of Circle, expressed the significance of the partnership, stating, “Our partnership with SBI Holdings represents a shared vision for the future of digital currency and is a significant milestone in Circle’s expansion plans in Japan and Asia Pacific.” This collaboration aligns with Circle’s broader strategy to distance itself from regulatory challenges in the United States and strengthen its global presence.

Yoshitaka Kitao, President and CEO of SBI Holdings, highlighted Japan’s preparation for the widespread introduction of stablecoins, emphasizing the strategic importance of the collaboration with Circle.

Circle’s Global Expansion Amid Challenges
Circle’s pursuit of global expansion extends beyond Japan. In June, the company obtained a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS), Singapore’s central bank. This move positioned Circle to navigate regulatory landscapes more favorably and broaden its reach.

Despite Circle’s past challenges, including exposure to the now-bankrupt Silicon Valley Bank, the company remains resilient. Over the past 18 months, Circle’s stablecoin market share has seen a decrease to 19%. The circulating supply, which peaked at $56 billion in June 2022, has reduced by 56% to $24.6 billion today. This decline is in contrast to Tether’s dominance, commanding a 68.5% market share with almost $89 billion USDT in circulation.

The Changing Landscape of Stablecoins
The total stablecoin market cap stands at $129.5 billion, representing 8.7% of the total crypto market cap, a figure that has halved over the past year. Circle’s recent rebranding, phasing out the USD Coin moniker to become USDC, reflects the evolving dynamics within the stablecoin ecosystem.

As Circle and SBI Group collaborate to propel stablecoin adoption in Japan, the global landscape of stablecoins continues to evolve. The partnership signifies a strategic move within the ever-changing crypto industry, bringing together established entities to navigate regulatory frameworks and drive innovation in the use of digital currencies.

Conclusion: A Synergistic Move for Stablecoin Adoption
Circle and SBI Group’s partnership emerges as a synergistic endeavor, blending Circle’s stablecoin expertise with SBI’s financial influence. As the collaboration unfolds, its impact on stablecoin adoption in Japan and the broader implications for global expansion will undoubtedly shape the narrative of the evolving crypto landscape. This strategic move reflects the maturation of the stablecoin market and sets the stage for further innovations and collaborations within the digital currency space.