45 Emergent Economics: The Crustal Movement of Japanese Finance Indicated by the Emergence of Regional Constant Currency M∞
──The Reason Why Hokkoku Bank Could Become the Only “Regional Central Bank”
Introduction: The End of Galapagos Finance and the Quickening of New Currency
LETITA is convinced that the Japanese financial system, especially regional finance, is currently standing at a historic structural turning point. At the core of this transformation is a new form of currency called stablecoins (SC) and the constant currency principle M∞ advocated by LETITA. The financial order that has long relied on “bank credit creation” as the sole source of currency supply is exposing its limitations in the face of the realities of Japan’s deflationary economy, declining birthrate and aging population, and the exhaustion of regional economies. Against this backdrop, supported by the 2023 revision of the Payment Services Act, digital currency—specifically, SCs that can be exchanged 1:1 with legal tender—has emerged.
Existing macroeconomic policies are premised on temporary circulating currency created through bank lending. However, M∞ is a
third currency model that has never existed before, where “the regional community continuously circulates currency through its own will and economic rationality.”In this paper, we will structurally analyze the fact that SCs possess the properties of a constant currency (M∞) that is decisively different from conventional currency. And, as the only case that has clearly realized and put this M∞ principle into practice, we will examine in detail
Hokkoku Bank’s “Tochika.” We will provide an overview of the latest trends among Japan’s major financial institutions, regional banks, and fintech companies based on hard data evidence, and unravel why only Hokkoku Bank was able to implement the “Regional Central Bank model” on the ground. This insight foresees the revitalization of regional economies and, by extension, the future of Japan’s entire financial structure.
Chapter 1: The Structure of the Constant Currency Principle M∞ and the Curse of Credit Creation
1.1. The Decisive Difference Between the “Vanishing Currency” Created by Banks and M∞
The conventional banking business is built around credit creation. When banks make loans to companies or individuals, temporary circulating currency in the form of deposits is created.
This currency inherently has the characteristic of having a short lifespan. This is because it follows the process of lending → repayment → extinction. Bank CFOs and risk managers have walked a history of over 100 years within the fixed idea that “loans are always repaid,” or in other words, “currency is something that eventually disappears.”
However, stablecoins are a completely different structure, a new type of currency that does not disappear upon repayment, or in other words, constant currency M∞ (constant currency of the living sphere). (Of course, SCs disappear upon reverse exchange (conversion to legal tender yen). But the important point is that it is not a currency that “necessarily disappears due to the institutional event of repayment” like bank lending.)
Constant currency M∞ is a currency generated when users charge legal tender yen (i.e., a 1:1 exchange with legal tender yen). Unless the user performs a reverse exchange (conversion to legal tender yen), this SC has the characteristic of continuing to circulate through the regional economic sphere indefinitely. While bank credit creation is an “instantaneous amplification,” M∞ is retained and continuously circulated by the user’s economic rationality (practical benefit).
In the mechanism of bank lending, because currency always “decays at the moment of repayment,” the amount of currency circulation in the regional economy is always exposed to downward pressure. This is one of the structural reasons why regional economies have been unable to escape long-term stagnation.
1.2. Conditions for the Establishment of the Constant Currency Principle M∞
For constant currency M∞ to be established in a regional society and drive the regional economy, the following three conditions are essential.
Practicality (Retention Incentive): The use of SC must offer residents point rewards, regional subsidies, and campaign incentives compared to using legal tender yen, which provides practical benefits. This requires the policy-making power of local governments.
Permanent Circulation Network: Because there is no concept of repayment, there must be an infrastructure where SC continues to circulate in all regional payments, such as local merchants, public utility charges, transportation, and remittances between residents, as well as an issuing entity (regional bank) that can sustainably maintain it.
Linkage with Regional Economic Growth: Increasing the circulation volume of SC (Mi: total credit volume) through local government campaigns, etc., and raising the regional GDP through the revitalization of regional consumption (Vi: acceleration of credit circulation velocity) to form a sustainable regional high-pressure economy.
It is precisely because they clearly recognize this principle that Hokkoku Bank is walking a different path from other financial institutions. The biggest barrier is that the bank’s credit-creation brain finds it difficult to realize the meaning of a “new type of currency that does not disappear upon repayment,” as LETITA analyzes.
Chapter 2: The Frontier of Regional Finance: The M∞ Prototype Embodied in Tochika
2.1. The Unique Status and Latest Evidence of Hokkoku Bank’s “Tochika”
Tochika (used through the regional currency app “Tochitsuka”), issued by Hokkoku Bank (now the CCI Group under Hokkoku Financial Holdings), holds a highly unique position in Japanese regional finance. Tochika is a regional stablecoin that can be exchanged 1:1 with legal tender yen, is permanently linked to local government policies, and is in daily circulation as a real-demand payment method; at present, Tochika is the only case that meets these conditions.
【Latest Hard Data Evidence for Tochika (as of December 2025)】
User Scale: As of October 2025, it has been officially announced that the number of registered users for Tochi-Tsuka has exceeded approximately 20,000. This is an exceptional pace of adoption for an SC in a limited region.
Financial Institution Collaboration: Originally, a Hokkoku Bank account was required, but since April 2025, it has become possible to charge from deposit accounts at Kono Shinkin Bank and Kanazawa Shinkin Bank, marking the beginning of collaboration with regional financial institutions. This is not merely a partnership, but the formation of a "joint currency zone by a regional financial institution alliance." A currency zone signifies the currency's credit, flow, and the economic sphere itself. Hokkoku Bank is the only one in the country that has stepped into this territory.
Payment Infrastructure: Tochi-Ca support using SoftPOS (contactless payment method) via general-purpose terminals such as smartphones is being prepared, and the diversification of payments and improvement of convenience for member stores are underway.
Regional Policy Collaboration: "Tochi-Tsuka" has been officially adopted throughout Ishikawa Prefecture, building a framework for "Ishikawa Tochi-Po" that can be used at over 2,000 stores, creating a structure that integrates bank-issued SC + municipal points + regional payment infrastructure.
2.2. The "Quasi-Regional Central Bank" Position Built by Hokkoku Bank
This Tochi-Ca model is the prototype of the "Regional Central Bank Model using SC as Currency" advocated by LETITA. The background to why only Hokkoku Bank could realize this model includes the following elements that are decisively different from other regional banks.
In-house Development Team (In-house DX): Hokkoku Bank positions digital regional currency and SC as the core product of its own DX strategy, and instead of "outsourcing to external fintech," it maintains product ownership and conducts agile development centered on in-house engineers. No other regional bank has been confirmed to have this in-house structure.
OS Strategy Involving Municipalities and Shinkin Banks: From the start of the service in Suzu City to the integration of payments, points, and SC on a single app (Tochi-Tsuka) across the entire prefecture, they are adopting a strategy of controlling the OS (operating system) of the regional financial sphere. This is effectively an attempt to reproduce the role of a central bank—issuance rights + payment network + settlement—at the regional level.
While many regional banks remain "demonstration participants hanging onto the SC infrastructure of external vendors," only Hokkoku Bank clearly envisions the sense that "we control the regional payment OS" and "SC = regional infrastructure (C-layer M∞) itself," and is executing toward its realization.
Chapter 3: Structural Gap: Why Other Players Do Not Aim for Regional Central Bank SC
While Hokkoku Bank is at the forefront of the M∞ model, other major financial players in Japan are either not entering this regional central bank model or are showing no interest. Understanding this structural gap is essential for predicting the future of regional finance.
3.1. B-layer SC Camp Fixed on Wide-Area and International Orientation
The interest of megabanks and major SC ventures is fixed not on regional economic spheres, but on larger-scale wide-area and international markets (B-layer).
Three Megabanks (MUFG, SMBC, Mizuho): They are proceeding with SC issuance demonstrations within the framework of the Financial Services Agency, but their targets are consistently international remittances, large corporate payments, and financial market infrastructure, and there is no regional currency orientation of "partnering with municipalities to control regional life payment infrastructure."
SBI Holdings (Including Regional Bank Collaboration): While promoting financial DX in wide areas, such as capital and business alliances with regional banks in the Tohoku region (reported in August 2025), the focus is on infrastructure development (Progmat Coin, etc.) targeting national SCs, international remittances, and interbank settlements, and they have not specified region-limited circulation SCs.
SC Ventures (e.g., JPYC): Both the issuance infrastructure and the use cases are "global" from the start, with the premise of being used for domestic and international payments, the DeFi ecosystem, and as cross-border payment infrastructure for APAC. It is clear that they have no interest in building a region-specific M∞ due to the scope of their business.
For these players, yen-denominated SCs are "B-tier infrastructure for international payments/digital asset payments," and "SC as a 'living currency M∞' for a certain prefecture or city" is not currently in their field of vision.
3.2. Other regional banks falling into external dependence and 'payment indifference'
While many regional banks other than Hokkoku Bank are exploring applications for "regional currency/regional payments," most of them remain at the demonstration experiment or consideration stage.
Example of Shikoku Bank: They began demonstration experiments for bank-issued SCs in 2023, but the issuance and management system relies on "Japan Open Chain" provided by G.U.Technologies, and it is leaning toward infrastructure verification with zero regional circulation so far.
Other regional bank consortia: It is reported that many participate in SC demonstrations as "guests" of SBI or mega-bank-affiliated fintech companies, and the structure is one where they rely on external vendors.
This structure confirms that the management of regional banks cannot even conceive of the scheme itself where "our bank can issue regional currency and become a regional central bank." SCs are recognized by regional banks only as "one of many payment services," and the paradigm shift of designing the regional currency infrastructure itself and taking ownership has not occurred. The thinking of regional banks is bound by the financial principle of action that has lasted for 100 years, that "lending = core business," and the very idea of redesigning currency itself and incorporating it into the local community is
not within the range of their thinking.
Chapter 4: Structural Revolution of the Banking Business Model and Maximum Incentive
How essential this battle over SCs, or M∞, is for the survival of regional banks becomes clear when viewed as a fundamental turning point in the bank's revenue structure.
4.1. Limits of the traditional revenue model
The banking business model centered on legal tender yen has long relied on the following revenue sources:
Conventional revenue = (Lending interest rate - Deposit interest rate) + Transfer fees + Incidental fees
This was a structure where the interest margin (interest income) was the main engine, supplemented by fees generated from access rights to the legal tender yen payment network (Zengin System). However, it has been confirmed from various financial statements that the interest margin business is structurally shrinking, and due to the prolonged low-interest-rate environment, 30-40% of regional banks are in the red or in a marginal revenue structure on a practical business basis. SCs provide a new source of revenue that does not depend on interest margins.
4.2. Innovation of revenue structure through the SC model and the gold mine of 'payment fees'
When shifting to the SC model, the bank's revenue source changes fundamentally.
SC model revenue = Issuance fees + Payment fees + Marketing revenue within the SC zone
Among these, the biggest gold mine is the payment fee (Merchant Fee).
Recapture of the payment market: Until now, banks have had most of the cashless payment market and payment fee market taken away by payment companies such as VISA, Mastercard, JCB, PayPay, Rakuten Pay, and d-Barai. The major cashless payments in Japan alone reach a scale of 100 trillion yen per year, and the payment fee market is estimated to be over 1 trillion yen.
Direct entry of banks: By becoming the issuer of SCs, banks can place the issuance, payment, and remittance of SCs entirely under their own control. This allows banks to directly enter the market of credit card companies and code payment companies. This is a "payment infrastructure backflow phenomenon" that is happening for the first time in financial history.
Low-cost superiority: As in the case of Hokkoku Bank, the merchant fee for regional SCs can be established at around 0.5% to 1.5%, which is far lower than existing credit cards (around 3%) or code payments (1.6% to 2.7%). This is extremely attractive to retailers and is a level that can drive out credit cards.
In other words, SC is "the moment when banks get a new main battlefield for the first time in 100 years," and only the bank that moves first can "virtually monopolize" this market. Banks should recognize that this payment revenue is the "second revenue engine after lending interest margins," but many regional banks have not yet realized it.
Final Chapter: The Unsolved Great Incident: The Future of Japan Indicated by the Hokkoku Model
5.1. Automatic growth of the regional economy brought about by the M∞ principle
The regional central bank model that uses SC as currency, that is, C-tier constant currency M∞, is the only policy tool that sustainably and automatically generates regional economic growth.
By sharing the same goals (regional economic growth, suppression of depopulation, promotion of relocation from other regions, etc.) between local governments and regional banks, and circulating SCs that are more practical for residents than legal tender yen, the circulation velocity of M∞ increases incrementally. Since SCs do not disappear upon repayment, this growth wave does not attenuate and continues to constantly stimulate the regional economy. SCs are money, but they deviate from the "essence of money" (which disappears upon repayment) that bank employees know. What SCs bring is a cognitive revolution that "it is not banks that create money, but the local community. Banks become the managers who maintain its flow."
5.2. As a 'mysterious experiment with the potential to succeed abnormally'
Hokkoku Bank is the only entity in Japan that is implementing this "stablecoin model as a regional central bank" on the ground. It can be said that Tochika is advancing the first "transplantation of currency infrastructure at the regional level" in Japanese history.
However, at present, there seem to be very few stakeholders who accurately understand the meaning of this structure. Neither the Financial Services Agency, mega-banks, SBI, nor other regional banks have the concept of "regional constant currency M∞," and no entity that grasps this meaning at an institutional and structural level has been confirmed at this time.
Hokkoku Bank's Tochika is at the stage of being watched as a "mysterious experiment with the potential to succeed abnormally."
Its success or failure depends on expansion to the entire prefecture, the scale of the number of member stores, the formation of a "currency zone" by the credit union/regional bank alliance, and whether the sphere of influence is solidified before the three mega-SC issuers come to take the C-tier.
What is here is not just financial DX or diversification of payment methods. This is a civilizational shift where "the creator of currency moves from banks to the local community" and the M∞ principle is its first clear form. I conclude that this unsolved great incident is the turning point of the financial structural revolution in Japan.
We have confirmed the mechanism by which M∞ regenerates the ground economy as "indestructible credit." So, what happens in regions where M∞ has begun to circulate sufficiently?
That is where the emergent economic zone emerges for the first time—
it is the first economic model in history that can policy-control the currency velocity Vi.
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