In recent months, there have been several announcements of fiat-pegged cryptocurrencies that help insulate investors from the volatility in the crypto markets.
The latest in this series of announcements come from Tokyo-based GMO Internet Group. The company released a statement on Tuesday that will start full-scale preparations to issue virtual stablecoin corresponding to the price of the Japanese yen. The stablecoin, will be known as “GMO Japanese YEN” with ticker symbol as [GJY].
GMO Internet explained that the GJY prelude which will be launched in 2019 will serve as a prelude to its blockchain-enabled global remittance and settlement business. This in reference to internet bank it operates in Partnership with Aozora Bank Group that utilizes blockchain technology for cross-border settlements. The GMO Aozora Net Bank was created to utilize Artificial Intelligence (AI), Internet of Things (IoT) alongside blockchain to provide safer and cheaper financial services to its users.
When introduced, the GJY will be used by GMO to settle its cross-border transactions as well as in its cryptocurrency businesses.
The stablecoin will be issued to Asian markets in the through Z.com, its global multi-service subsidiary which also provides an indices and commodities trading platform as well as a cryptocurrency exchange.
GMO’s Cryptocurrency Businesses
The company already leverages on its internet expertise to benefit from the cryptocurrency through its crypto mining operation and crypto exchange operations. Information on its website read:
“We operate cryptocurrency mining business that supports mining infrastructure of cryptocurrencies, and cryptocurrency exchange business that offers cryptocurrency trading service by leveraging our accumulated know-how in Internet Infrastructure and Internet Finance.”
In addition to its cryptocurrency mining pools, the IT giants also manufacture application-specific integrated chips (ASICs) for cryptocurrency mining.
The Era of Stablecoins
In the past, Tether USD (USDT) used to be the only recognizable fiat-pegged cryptocurrency available but that era is fast changing. In September alone, notable players including Gemini exchange, Circle payment platform, and blockchain startup Paxos announced dollar-pegged cryptocurrencies.
As Smartereum reported, that IBM, Stellar and blockchain startup Stronghold were working towards a cryptocurrency version of the US dollar. The partners said that the stablecoin will be supported by dollar equivalent stored at a US bank with an FDIC insurance cover.
Similarly, Gemini, owned by the popular Winklevoss twins announced its stablecoin, Gemini USD [GUSD]. Smartereum reported last month, the Gemini Trust Company will hold USD deposits corresponding to the number of tokens in circulation at an FDIC insured bank and will enjoy the approval of the New York Department of Financial Services (NYDFS).
In Asia, the founding partners of Xiong’An (Grandshores) Blockchain Fund are working towards a yen-pegged stablecoin just like the GJY. According to local reports, the $1 billion China-based blockchain fund expects to introduce the stablecoin by the 2018 year end.
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.