Japan’s first deposit-type stablecoin “Tochika” has been launched

As announced in April 2023, Hokkoku Bank, together with the City of Suzu, Kono Shinkin Bank and Digital Platformer, has launched a deposit-backed stablecoin using blockchain technology in Suzu City, Ishikawa Prefecture, with the aim of increasing productivity through digitization and cashless payments.

In the summer of 2023, the consortium applied for “Suzu Tochituka,” a digital local currency service that can be used by individual customers, and laucnhed “Suzu Tochipo,” points issued by Suzu City that can be used for payments at participating stores. The Bank originally planned to start circulating “Suzu Tochika,” a stablecoin issued by Hokkoku Bank that can be used in Suzu City, around winter 2023, but got delayed to the beginning of the new fiscal year.

A Tochika account can be opened by registering a bank deposit account for charging on the Tochitsuka app. After opening, the wallet can be charged from the registered bank account, with 1 tochika equating to 1 yen, and later redeemed at the same rate. Tochika is accepted at Tochituka member stores. Tochipo are not redeemable against cash nor bank deposits, and generally can be used at stores affiliated with the local government.

The settlement fee for the “Suzu Tochika” is set at 0.5%, which is close to the lowest level internationally. The spread of inexpensive cashless payment methods will increase the use of cashless payments in the region and digitalize the point system in Suzu City, thereby contributing to the circulation of funds in the region and improving productivity.

Later, the system is set to expand to other cities and towns in Ishikawa Prefecture to realize “Ishikawa Tochika,” a local digital currency that will circulate throughout the prefecture, utilizing the interoperability of the blockchain. For cities and towns that Hokkoku Bank and Kono Shinkin Bank do not cover, other regional partners will be recruited.

The blockchain technology platform used for recording and managing payment data in this project is Digital Platformer’s digital currency and decentralized ID issuance platform “SHIKI”. The blockchain encryption technology prevents falsification and copying, and ensures a secure and highly traceable payment system.

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