GMO Internet Launches a Japanese Yen-Pegged Stablecoin (Yen-Pegged Currency) "GMO Japanese YEN (Ticker Symbol: GJY)" in Asian Countries in 2019
TOKYO, Oct. 10, 2018 /PRNewswire-PRWeb/ -- GMO Internet (https://www.gmo.jp/en/) will start full-scale preparations to launch a stablecoin, a cryptocurrency with stable value, with a view to entering "payment service" in the cryptocurrency sector.
Stablecoins are price-stable cryptocurrencies whose values are backed mainly by legal currencies. GMO Internet plans to launch a Japanese yen-pegged currency "GMO Japanese YEN (ticker symbol: GJY)" through "Z.com," the global brand for overseas strategies of GMO Internet Group, in Asian countries in 2019.
GMO Internet positions the cryptocurrency business as its strategic business sector and is already engaged in cryptocurrency exchange business and cryptocurrency mining business. Starting with the launch of the new "Yen-pegged currency," we will now support borderless cryptocurrency transactions.
Background of the full-scale preparations for launching the stablecoin
One of the challenges in promoting and enhancing market liquidity of cryptocurrencies is to stabilize price volatility which poses a risk to remittance and payment. Amid such circumstance, "stablecoins" are attracting attention as price-stable cryptocurrencies whose values are backed by a legal currency or other cryptocurrency. In fact, there are 57 stablecoins globally, of which 23 are already in circulation. Total market capitalization of stablecoins reached 3 billion dollars (approx. 341,452.31 million yen(*1)), and the transaction volume of "Tether" with the highest transaction volume among the stablecoins is the second largest behind Bitcoin among all cryptocurrencies. (*2)
GMO Internet Group positions the cryptocurrency business as its strategic business sector, and launched cryptocurrency exchange business in May 2017 and cryptocurrency mining business in December 2017. The cryptocurrency-related business domain consists mainly of "exchange," "mining" and "payment." GMO Internet Group has already entered "exchange" and "mining" domains but was still conducting research in the payment domain to learn whether cryptocurrencies can be used as payment currencies in terms of their volatility.
Under such circumstances, GMO Internet Group recognized the potential of stablecoins to achieve price stability and decided to start full-scale preparations to launch stablecoins to support borderless cryptocurrency transactions with a view to future use of cryptocurrencies for payment.
(*1) As of October 9, 2018 (*2) Source: Blockchain Luxembourg SA, "THE STATE OF STABLECOINS"
About the stablecoin "Yen-pegged currency" to be launched
There are mainly three categories of stablecoins: "fiat-collateralized," backed by legal currencies, "crypto-collateralized," backed by other cryptocurrencies, and "non-collateralized," not backed by any assets but stabilized with a smart contract mechanism. GMO Internet is now preparing to launch a fiat-collateralized stablecoin backed by the Japanese yen (Yen-pegged currency) and considering to adopt a currency board arrangement (*3).
GMO Internet plans to launch a Japanese yen-pegged currency "GMO Japanese YEN (ticker symbol: GJY)" through "Z.com," the global brand of GMO Internet Group, in Asian countries in 2019.
(*3) An exchange policy under which in this case the value of "Yen-pegged currency" is secured by an equal amount of Japanese Yen held in reserves. The adoption of the arrangement, including where Japanese yen will be held, is under consideration.
Future vision of "Yen-pegged currency"
Stablecoins can be one of the solutions to hyperinflation afflicting many developing countries as an alternative currency to the unreliable local currency although issues such as true decentralization must be overcome. Also, as the cashless payments are increasingly spreading in developed countries, stablecoins have potential to transcend national currencies and be a global-standard for the innovative financial infrastructure. Of all the stablecoins, we believe the "Yen-pegged currency" backed by the Japanese yen has high potential to be an ideal currency with high reliability as well as low remittance fee and fast transaction speed which are distinctive advantages of cryptocurrencies. GMO Internet will support reliable borderless transactions by launching "Yen-pegged currency."
GMO Internet Group
GMO Internet Group is an Internet services industry leader, developing and operating Japan's most widely used domain, hosting & cloud, ecommerce, security, and payment solutions. The Group also includes the world's largest online FX trading platform, as well as online advertising, Internet media, and cryptocurrency related services. GMO Internet, Inc. (TSE: 9449) is headquartered in Tokyo, Japan. For more information, please visit https://www.gmo.jp/en/
SOURCE GMO Internet Group
