Sony Bank plans stablecoin proof-of-concept with Polygon and Settlemint

Sony Bank has begun consideration of a proof of concept (PoC) for issuing a stablecoin on Polygon, in collaboration with Polygon Labs and SettleMint. In this PoC, Sony Bank will handle the legal organization and requirements definition for issuing the stablecoin, adopt the “Polygon PoS” blockchain, and SettleMint, with a diverse track record in blockchain development, will be responsible for developing and building the foundation for the proof of concept.

Through this collaboration, Sony Bank aims to provide secure, safe, and valuable services in the web3 domain by conducting this proof of concept.

A stablecoin is a type of electronic payment means defined in the amended Payment Services Act, which was enacted in June 2023.

While Sony Bank is just starting its journey towards a stablecoin, Hokkoku Bank, as announced in April 2023, together with the City of Suzu, Kono Shinkin Bank and Digital Platformer, has launched a deposit-backed stablecoin using blockchain technology at the beginning of the new fiscaly year. Read more here.

Purpose

Through this PoC, Sony Bank will identify technical and legal issues surrounding the issuance, redemption, and circulation of stablecoins, and continue to explore the popularization of stablecoins and their utilization in expanding the safe and secure economic zone comprising creators and fans in the web3 era.

Background

While the web3 economic zone is globally expanding, numerous issues remain, such as user protection, countermeasures against money laundering and terrorist financing from the perspective of decentralization and anonymity, and legal organization surrounding stablecoins.

In addition to building and verifying the mechanism for issuing, redeeming, and circulating stablecoins using blockchain technology, this PoC will also consider utilizing zero-knowledge proof technology from the perspective of identity verification. As a result of Sony Bank’s risk-based approach, it aims to thoroughly address countermeasures against improper use of funds while expanding the issuance and circulation market for secure, safe, and convenient stablecoins.

Sony Bank has announced the release of “Sony Bank CONNECT” this summer to support the expansion of the web3 economic zone comprising creators and fans. While incorporating customer requests in the future, Sony Bank is currently defining requirements and designing the release of a wallet function based on blockchain technology. Considerations for the stablecoin, which is the subject of this proof of concept, will also be made with an eye toward integration with “Sony Bank CONNECT.”

Last year, on the occasion of opening its Japan office together with its partner Fujitsu, we had the opportunity to record an eXponential Finance Podcast episode with Matthew Van Niekerk, Co-Founder & Chief Executive Officer at Settlemint. You can find the podcast with links to all major platforms here.

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