Today Japan’s Decurret DCP announced the official launch of its tokenized deposit solution, DCJPY. Five weeks ago it started production testing of the network, partnering with the Internet Initiative Japan (IIJ) and GMO Aozora Net Bank, the first bank to tokenize its deposits on DCJPY.
DeCurret DCP has several big name backers that are not involved at launch, including MUFG, SMBC and SBI Holdings. In preparation for the go-live, the startup added three full time directors in addition to the representative director (CEO). Two of the new directors are from banks – MUFG and Japan Post.
Digital currency payments have several benefits, depending on the payment infrastructures in the jurisdiction. In some economies that lack faster payments, it enables 24/7 instant payments. For advanced economies, digital currency provides transparency, programmability and a means of settlement on DLT networks. The latter two points can enable new business models.
A green first use case
The first DCJPY use case involves server hosting company IIJ procuring renewable energy certificates (RECs), tokenizing them and selling them to its clients. Apart from using the tokenized RECs for its clients, IIJ is also considering the secondary distribution of the tokens.
For its part, GMO Aozora Net Bank not only offers DCJPY as a direct solution for its customers, but it also provides Banking as a Service (BaaS), with over 600 BaaS contracts. DCJPY now forms part of its BaaS offering. The bank is half owned by GMO Internet and GMO Financial. GMO Internet is the parent of GMO-Z, the issuer of New York-regulated stablecoins, including the dollar (ZUSD) and yen (GYEN).
Plans for security token settlement
Decurret DCP also plans to launch solutions to settle security token issuance. For that purpose, in January it partnered with Securitize, the firm behind BlackRock’s tokenized money market fund. Given DAO tokens are also on the agenda we can expect to see integration between the DCJPY Financial Zone and public blockchains.
DCJPY consists of two zones, a Financial Zone where banks mint tokens and integrate with their core banking systems. Multiple Business Zones synchronize transactions with the Financial Zone.
In our paper on tokenized deposits launching in September, we explore various tokenized deposit designs in depth (see below). The report goes beyond outlining the design options and analyzes their strengths and weaknesses, suggesting options that have not been publicly discussed to date.
Ledger Insights will soon publish a report on bank-issued stablecoins and tokenized deposits featuring more than 60 projects. Sign up for notification of its release.
