‘Priced out’ — Metaplanet launches study on Bitcoin-backed digital credit

Metaplanet plans to turn Strategy’s STRC design into a digital credit framework to help the Bitcoin treasury firm and other small firms locked out of Japan’s rigid bond market. 

To achieve this plan, dubbed Project Nova, the firm has partnered with Metaplanet Securities, stablecoin issuer JPYC, and tokenization firm Progmat. 

According to the arrangement, the Bitcoin-backed digital credit framework will use Metaplanet’s BTC holdings (currently at 43K coins) as collateral.

However, unlike the yield-paying STRC that is issued only by Strategy, other mid-sized and high-growth firms in Japan can leverage the platform. They can issue their own tokenized digital credit to investors. Think of it as an open marketplace for other firms to issue their credit directly to investors. 

The study aims to explore the possibility of round-the-clock trading and settlement with daily interest. Underscoring the importance of the project, Metaplanet CEO Simon Gerovich said, 

This is Project NOVA at work: using Bitcoin’s strength as an asset to open Japan’s credit markets to companies the current system prices out.

Earlier this year, the firm launched a venture capital firm and asset management subsidiaries. The first investment was in JPYC, a regulated stablecoin issuer in Japan, and Project Nova partner. The subsidiaries are meant to be at the center of its digital credit and BTC capital markets.

Four months later, the recent study into a white label platform for BTC-backed digital credit now unravels the firm’s aggressive long-term BTC plan. The move also comes at a time when Japan is reviewing crypto ETF approvals. 

Assessing Bitcoin’s digital credit market

Pioneered by Michael Saylor’s Strategy, BTC digital credit refers to debt instruments like preferred stocks (like Stetch [STRC]) or convertible loans backed by the firm’s crypto holdings. 

Metaplanet and Bitmine (the world’s largest Ethereum treasury) are both exploring STRC-like instruments for more crypto accumulation. 

Interestingly, STRC faced a market distress and trust test after de-pegging from its $100-target level. Despite the de-peg, volumes remained strong as buyers came in to pick the stock at its lows. 

STRC did about $9 billion in June, according to a report by Bitcoin Treasuries. In fact, the stock has since recovered to close to its $100, underscoring renewed confidence and trust in BTC digital credit.     

It’s unclear how the Japanese market will receive the BTC-backed digital credit plans. In the meantime, Metaplanet’s stock jumped 4% following the update. 

Final Summary

• Metaplanet is evaluating the feasibility of launching an open marketplace for BTC-backed digital credit for Japanese small firms.
• It remains unclear whether Japan’s regulators and market will embrace the plan.