Japan's largest domestic payment network JCB signed a memorandum of understanding with Circle to explore the use of USDC for cross-border payments and merchant transactions. The agreement allows JCB to test whether stablecoins can reduce friction in international settlement and support payment use cases tied to merchants in Japan through a proof of concept for internal cross-border fund transfers and evaluation of stablecoin payments at Japanese merchants for international visitors. Japan created a legal framework for stablecoins through amendments to the Payment Services Act that took effect in 2023, allowing banks, trust companies, and licensed money transfer providers to issue fiat-backed tokens.
The initial scope focuses on testing USDC for JCB's internal cross-border fund transfers and evaluating stablecoin payments at Japanese merchants for international visitors. JCB is testing whether blockchain-based settlement can support internal treasury movement, merchant acquiring, and cross-border payment flows across a large domestic network. The companies stated they will also assess technologies that support interoperability across multiple blockchain networks.
JCB Builds on January Stablecoin Project with Digital Garage and Resona Holdings
The JCB-Circle agreement builds on an earlier project JCB launched in January with Digital Garage and Resona Holdings to test stablecoin payments at physical stores in Japan. That initiative focuses on identifying technical and operational challenges in bringing stablecoin payments to domestic merchants. The new memorandum adds a cross-border layer to that work by examining how USDC could support international fund transfers, visitor payments, and merchant services. The companies did not provide a timeline for commercial deployment.
In June, Circle and Nomura were reported to be developing a stablecoin-based foreign exchange settlement service for Japanese companies that would allow businesses to convert yen into USDC for cross-border transactions and near-instant settlement. Lawson plans to test yen-denominated stablecoin payments at a Tokyo location beginning in August. Netstars has launched a merchant payment service supporting USDC, USDT, and JPYC across the Solana and Polygon blockchains.
Japan's Payment Services Act Amendments Took Effect in 2023
Amendments to the Payment Services Act that took effect in 2023 allow banks, trust companies, and licensed money transfer providers to issue fiat-backed tokens. That framework gives stablecoin projects a clearer legal path than in many other markets. 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 placing the sector under stricter market rules.
For Circle, the agreement gives USDC another path into regulated payment infrastructure in Asia. 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. USDC's institutional strategy depends on integrations with regulated financial firms, payment networks, and corporate settlement services rather than retail trading volume.
Stablecoin Payments Create Settlement Opportunity for Payment Firms
For merchants in Japan, stablecoin payments could create a new option for international visitors who hold dollar-linked digital assets or use stablecoin wallets. For payment firms, stablecoins can move value across borders faster than traditional banking rails, but adoption depends on compliance, liquidity, redemption access, fraud controls, and merchant integration. JCB's role allows testing those issues inside existing commercial infrastructure.
Stablecoin payments require clear operational rules including predictable conversion, settlement timing, refund processes, accounting treatment, and protection from technical failures. Cross-chain interoperability may create new risk if systems depend on multiple networks and bridges. JCB and Circle are testing whether USDC can support fund transfers and merchant use cases inside a regulated payment environment.
FAQ
What did JCB and Circle agree to test with USDC?
JCB and Circle signed a memorandum of understanding to explore the use of USDC for cross-border payments and merchant transactions. The companies will test USDC for JCB's internal cross-border fund transfers through a proof of concept and evaluate stablecoin payments at Japanese merchants for international visitors.
What legal framework does Japan have for stablecoins?
Japan's amendments to the Payment Services Act that took effect in 2023 allow banks, trust companies, and licensed money transfer providers to issue fiat-backed tokens. In June, the Lower House passed a bill that would classify crypto assets as financial instruments.
What is USDC's market position compared to USDT?
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.
