Stripe Tour Tokyo - Roundtable: A Policy Discussion on Stablecoins
Prior to the start of the Stripe Tour Tokyo main event, Stripe hosted a policy-themed breakfast discussion to explore the transformative potential of stablecoins, bringing together representatives from finance, technology, and regulatory bodies. The session provided a deep dive into the past, present, and future of this emerging financial technology, focusing on its global utility, key use cases, regulatory importance, and specific implications for the Japanese market.
In reporting on the event, we adhere to Chathan House rules, i.e. recap the discussion without attribution to individual speakers. The opening address was delivered by a leading expert in payments and fintech with over two decades of experience in developing innovative money movement and commerce solutions. The discussion that followed was rich with insights from participants across the fintech, banking, and startup ecosystems.
Part 1: A Foundational Overview of Stablecoins and Their Global Promise
The discussion began by establishing a clear definition of stablecoins for a diverse audience. A stablecoin was described as a form of digital currency whose value is pegged on a 1:1 basis to a stable real-world asset, most commonly a major fiat currency like the U.S. dollar. It was explained that holding a stablecoin is functionally equivalent to holding a digital representation of that underlying asset, which is held in reserve in a regulated financial institution. For instance, holding $100 in a USD-backed stablecoin represents a claim on $100 of actual U.S. dollars.
The primary advantage presented was the technology's ability to make moving money globally more efficient and seamless. By leveraging the inherent properties of blockchain technology, stablecoins are programmable, global from their inception, and operate 24/7/365. This stands in stark contrast to the traditional financial system, which is fragmented, slow, and constrained by banking hours and complex settlement processes.
A powerful analogy was drawn, likening the impact of stablecoins on finance to the impact of email on communication. Just as email revolutionized the way messages are sent and received across the globe, stablecoins are poised to do the same for sending and receiving value, effectively bringing money and commerce into the native era of the internet.
Part 2: Key Use Cases Driving Global Adoption
The discussion highlighted several key use cases that have already demonstrated significant traction and are driving the global adoption of stablecoins. These examples illustrated the technology's tangible, real-world utility beyond the speculative nature often associated with other digital assets.
1. Access to U.S. Dollars and Financial Stability
A primary driver of adoption has been the demand for a stable store of value in regions with volatile local currencies. In markets across Latin America and Africa, where high inflation and political instability can rapidly erode the value of local money, USD-backed stablecoins provide a crucial financial lifeline for both businesses and individuals. It was noted that this access to a stable currency, often taken for granted in developed economies, is a powerful tool for financial inclusion and empowerment.
Fintech companies were cited as being at the forefront of this movement, building entire banking platforms on top of stablecoin infrastructure. These platforms offer users the ability to save and transact in a stable asset, shielding them from local economic turmoil. The underlying APIs provided by payment infrastructure companies are the critical enablers, allowing for seamless conversion between volatile local currencies and stable digital dollars.
2. Revolutionizing B2B Payments and Cross-Border Commerce
The second major use case discussed was the transformation of business-to-business (B2B) payments and international trade. The traditional reliance on the SWIFT network for cross-border transactions was characterized as slow (2-3 day settlement times) and expensive, particularly for small and medium-sized enterprises (SMEs).
Stablecoins offer a superior alternative that is nearly instantaneous and dramatically cheaper, with transaction costs often reduced to mere pennies. Several prominent examples of this in action were shared:
- A major global e-commerce platform enables millions of its merchants across more than 30 countries to accept payments directly in stablecoins.
- A leading aerospace and communications company uses stablecoin rails for its satellite internet service. In emerging markets where it accepts payments in volatile local currencies, the company can immediately convert and repatriate those funds back to the U.S. as stablecoins, vastly improving its corporate treasury management and capital efficiency.
- A global HR platform that facilitates remote work leverages stablecoins to manage payroll and payouts to its international workforce, overcoming the complexities and delays of traditional cross-border payroll.
Part 3: The Critical Role of Regulation in Building Trust and Fostering Growth
A central theme of the entire discussion was the indispensable role of clear and thoughtful regulation. There was a strong consensus that a robust regulatory framework is not an obstacle to innovation but is, in fact, the most critical ingredient for building the trust necessary for mainstream adoption.
Japan was lauded as a global leader in this respect, having been one of the first major economies to enact a comprehensive legal framework for stablecoins in 2023. Similar forward-thinking regulatory efforts in Singapore and the European Union's Markets in Crypto-Assets (MiCA) regulation were also highlighted as positive developments.
It was argued that regulation provides the clarity and safeguards that both institutional and retail users require to engage with this new technology confidently. By establishing rules for reserves, issuance, and consumer protection, regulators can create a safe environment where stablecoins can integrate into the broader financial system, moving from a niche product to a foundational piece of economic infrastructure.
Part 4: Interactive Discussion – Local Context and Geopolitical Nuances
The interactive portion of the session delved into the specific challenges and opportunities for stablecoins within Japan and the broader, complex geopolitical landscape.
The Demand for Non-USD Stablecoins
The conversation turned to the potential for stablecoins backed by currencies other than the U.S. dollar, such as the Japanese Yen and the Euro. A participant from a global fintech firm noted that while their initial stablecoin offerings might focus on the Euro and British Pound, they see significant potential for a Yen-backed product in Japan.
The response from the keynote speaker was that the current dominance of USD-pegged stablecoins reflects the market's early stage. As regulatory frameworks mature in other major economic zones, a corresponding rise in stablecoins pegged to other stable assets like the JPY is expected. The fundamental demand is for stability, which these currencies offer.
A participant from a Japanese firm specializing in this area added a crucial perspective on the national importance of a JPY-backed stablecoin. It was argued that for the Japanese Yen to maintain its global relevance in an increasingly digital world, it must have a strong, liquid, and accessible digital form. Without it, Japan risks seeing a significant portion of digital commerce and finance migrate to USD-based rails, which could have long-term consequences for the nation's economic sovereignty.
Global Interoperability vs. Geopolitical Fragmentation
A thoughtful question was raised concerning the tension between the global, borderless promise of stablecoins and the reality of an increasingly fragmented digital world, marked by national firewalls, differing data privacy regimes (like GDPR), and the geopolitical use of financial sanctions.
The view presented was that stablecoin technology itself can be a powerful tool for bridging these divides. The ultimate vision is not for one stablecoin to dominate, but for an interoperable system where value can flow seamlessly between different digital currencies. For example, a system could be built where a user holding a JPY stablecoin can pay a European merchant, who instantly receives the value in a Euro-backed stablecoin, all without the friction of the traditional correspondent banking system. This positions the technology as a potential unifier in a fragmented world.
Consumer Adoption in a Cash-Heavy Market
A question was raised from the banking sector about the path to consumer adoption in Japan, a market where cash remains prevalent. The discussion explored the classic "chicken-and-egg" problem: consumers won't use a new payment method unless merchants accept it, and merchants won't accept it unless consumers are using it.
The key to breaking this cycle, it was suggested, lies in providing clear incentives. While currency stability may be the primary driver in some regions, in Japan, the incentive structure will likely need to be different. One innovative model proposed was for businesses to issue their own branded stablecoins. By doing so, they could earn yield on the underlying reserve assets and pass those earnings back to their customers in the form of enhanced rewards or discounts, creating a compelling value proposition that could encourage a shift away from cash. It was also noted that Payment Service Providers (PSPs) will play a vital role by integrating stablecoin acceptance into existing point-of-sale systems, making the experience frictionless for both merchants and consumers.
Security, Compliance, and Fraud Prevention
In response to a question about fraud, it was stressed that the highest standards of compliance and security are non-negotiable. All stablecoin transactions on established platforms are subject to the same rigorous checks as traditional payments, including KYC, KYB, and sophisticated AML monitoring. Furthermore, it was explained that leading payment platforms are now deploying advanced AI and machine learning models, trained on vast datasets of global transactions, to proactively detect and prevent fraudulent activity in the stablecoin ecosystem.
Conclusion
The discussion concluded with a sense of optimism about the future of stablecoins in Japan and globally. While acknowledging that the industry is still in its early stages, the combination of technological innovation and proactive regulation is paving the way for a significant transformation. The insights shared pointed toward a future where stablecoins could become a foundational layer of the digital economy, enabling a more efficient, inclusive, and interconnected global financial system.
Norbert Gehrke
