Tokyo-based blockchain firm Crypto Garage today announced that it has gained regulatory approval to start the trail of its settlement system using Blockstream’s Liquid Sidechain.
Crypto Garage claims to be the first Japanese blockchain firm to receive such approval under the country’s regulatory sandbox scheme. The firm, along with its partnered cryptocurrency exchanges, will continue the pilot program for a year.
The Digital Garage subsidiary with its platform Settlement will allow the exchanges to issue stablecoins pegged to the Japanese Yen on the Liquid Network, which was launched last October. The exchanges can further trade against liquid Bitcoin that are pegged to Bitcoin on a sidechain launched by Blockstream Corporation.
Moreover, the platform will also support atomic swaps to enable the tokens to be swapped simultaneously.
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“This will enable rapid, secure and confidential transfer of the crypto assets while eradicating counterparty risk. In addition, SettleNet will provide the regulatory authorities with the functionality to monitor any unlawful trade, including money laundering,” the press release noted.
The firm, however, has confined the project only to Japanese crypto exchanges holding the operational license in the country during the trial period and has put a limit on the transaction volume.
Japan and Blockchain
Many recent developments in the blockchain sector in Japan show that the country’s regulators are trying to boost the sector again following a setback due to the Coincheck incident in early 2018.
Earlier this month, Coincheck also received an operational license from the financial regulator and resumed its operations. The Financial Services Agency (FSA) also revealed that, due to Japan’s liberal stance on the sector, more than 190 cryptocurrency firms are trying to enter the country.