Japanese regional banks HokkokuBank and Kono Shinkin Bank are launching a local digital currency initiative in the Ishikawa prefecture. The initiative allows people who participate in community volunteer services to receive points that can be spent at local stores through the Tochitsuka app, which is powered by blockchain technology.
Digital Platformer, the developer of the Tochitsuka app, has partnered with over 50 retail outlets where users can redeem their points. The company also plans to expand the solution to other regions in the future. One of the key benefits for merchants to join this initiative is the low transaction fees of just 0.5% for the upcoming stablecoin called Tochika.
By utilizing blockchain, Digital Platformer is able to share data between retail outlets and the partnering banks, achieving cost savings and efficiency. It is believed that the blockchain technology being utilized is Hyperledger Iroha, developed by the core Iroha developer Soramitsu, which is based in Japan. Soramitsu has successfully implemented the Iroha technology in Cambodia’s Bakong project.
Earlier this year, QR Investments, a subsidiary of HokkokuBank, invested in Digital Platformer. This partnership not only supports the local digital currency initiative but also enables Digital Platformer to provide digital identity services.
The launch of this initiative aligns with the new legislation introduced in Japan in June which supports stablecoin issuance. Japan has seen a rise in stablecoin initiatives, with Progmat Coin being one of the notable platforms that has garnered attention from various banks. Binance, a leading cryptocurrency exchange, is exploring the use of Progmat Coin for issuing trust-based stablecoins, pending regulatory approval.
The introduction of local digital currencies and stablecoins in Japan showcases the country’s commitment to embracing blockchain technology and the potential benefits it could bring to local communities and businesses. With low transaction fees, increased efficiency, and the ability to support digital identities, such initiatives have the potential to revolutionize local economies and enhance financial inclusion.