Bitcoin Sidechain Goes Under Trial After Japanese Approval

Crypto Garage is a blockchain development firm based in Japan and they have recently announced that they have gained regulatory permission to test out its settlement system using Blockstream’s Liquid Sidechain.

The blockchain development company originally claimed to be the first such finance project to receive a green light under the Japanese government regulatory sandbox scheme which will now conduct a 12-month pilot trial with a group of participating cryptocurrency exchanges.

The project is called Settlenet and uses Liquid as part of an arrangement allowing exchanges to issue stablecoins tethered to yen as well as trading against Liquid Bitcoin, Blockstream’s sidechain.

In addition to this, the feature also makes use of what are known as ‘atomic swaps’, which are the ability to make cross-blockchain transactions without manually having to convert the assets.

The blockchain development firm released a press release which wrote, “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.”

Back in October, Blockstream released Liquid as the first public Bitcoin sidechain which was ready for production.

The integration came at quite an important time for Japan which has forged a permissive but strict regulatory environment for exchanges in particular, after there were several high profile hacks over the past year.

One of the biggest hacks in crypto history is that of Coincheck last January after the exchange lost a half a billion dollars to hackers. As reported by CoinTelegraph, the exchange has now recently announced that it has gained full regulatory licensing from the nations finance regulator, the Financial Services Agency.

Coincheck lost $530 million in altcoin tokens at the time and now the exchange joins the slowly increasing volume of officially sanctioned exchange serving the Japanese market.

In terms of price, Bitcoin once again suffered a loss over the weekend, dropping below the $3,600 key resistance level. The leading cryptocurrency is now worth $3,570 after a 4.31 percent drop over the past 24 hours leaving it with a market cap of $62,462,941,314.

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