Japan’s Crypto Garage To Trial Blockstream’s Liquid Sidechain For Exchanges
Japan-based blockchain firm Crypto Garage has received official authorization to conduct the first blockchain and finance project under the Regulatory Sandbox in Japan.
Crypto Garage, a joint venture of Digital Garage and The Tokyo Tanshi Co., engages in research and development (R&D) and commercialization of blockchain-based financial services. The company’s main mission is to build a financial system that will benefit any business in Japan’s financial sector.
In its announcement, Crypto Garage said that it has been granted entry into the Japanese government’s regulatory sandbox for a year-long pilot to construct a trading environment that can realize the immediate sale and purchase of cryptocurrencies among 3–5 licensed crypto exchanges.
During the pilot, Crypto Garage will provide participating crypto exchanges with a blockchain platform, dubbed Settlenet, to issue a stablecoin pegged to Japanese Yen (JPY-Token) and to provide a settlement service between the stablecoin and and crypto assets. Settlenet is using Liquid Sidechain, a trading platform developed by blockchain firm Blockstream with the aim of bringing much-needed liquidity to the crypto market by bringing together industry participants.
“Settlenet allows the exchanges to issue a stablecoin pegged to Japanese Yen (JPY-Token) on the “Liquid Network,” and trade against Liquid Bitcoin (L-BTC) that are pegged to Bitcoin on a Bitcoin sidechain launched by Blockstream Corporation,” Crypto Garage said.
According to Crypto Garage, Settlenet will also allow participating exchanges to simultaneously deliver LBTC in exchange for the receipt of JPY-Token on the Liquid Network, which will enable rapid, secure and confidential transfer of the crypto assets while eradicating counterparty risk. In addition, the blockchain platform will provide regulators with the functionality to monitor any unlawful trade, including money laundering.
The goal of the initiative is to overcome challenges and also to accelerate the growth of the overall crypto market by enabling delivery versus payment settlement of cryptocurrencies.
“This initiative is a proof-of-concept project authorized by Regulatory Sandbox in Japan,” Crypto Garage said. “The project will test and validate the secure transfer of crypto assets on a sidechain network and the possibility of building a stable and healthy over the counter (OTC) market by improving transparency for the price-making process. “
Source: Read Full Article