Circle is considering issuing a stablecoin in Japan, given that legislation governing stablecoins took effect on June 1, the payment services company’s co-founder and CEO Jeremy Allaire said.

In an interview with CoinDesk Japan, Allaire said that if stablecoins become more widely used for cross-border trade, foreign currency transactions and global commerce, Japan will become an extremely large market.

Japan’s stablecoin bill makes it one of the first countries to establish a framework for the use of overseas stablecoins, which Allaire considers “the most important thing the government and the Financial Services Agency have done.”

He said that Circle is interested in partnerships in Japan, which he visited last month.

Japan’s revised Payment Services Act certifies stablecoins backed by legal tender as an “electronic payment method” and allows their issuance.

Stablecoin issuers will have to abide by tough rules. Stablecoins must be pegged to the yen or other legal tender and guarantee holders the right to redeem them at face value. Only licensed financial institutions like licensed banks, registered money transfer agents and trust companies will be able to issue stablecoins.

The country’s Financial Services Agency moved to lift a ban on overseas stablecoins in December last year.

Circle recently obtained a Major Payment Institution (MPI) license in Singapore, which allows it to offer digital payment token services, cross-border money transfer services and domestic money transfer services in the city-state.

Major Japanese financial institutions have been exploring stablecoins, with Mitsubishi UFJ Trust and Banking Corporation announcing its plans to issue its own stablecoin platform, called Progmat.

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