Japan’s largest bank to deploy stablecoins on top blockchains
Japan’s biggest lender, Mitsubishi UFJ Financial Group (MUFG), has unveiled plans to introduce and distribute stablecoins backed by banks on various public blockchains.
In collaboration with blockchain interoperability specialist Datachain and Toki, a cross-chain bridge, MUFG aims to facilitate seamless interoperability of these authorized stablecoins across multiple blockchains using its Progmat Coin protocol.
MUFG’s blockchain-powered platform is designed specifically for the issuance and management of stablecoins that are pegged to the Japanese yen at a 1:1 ratio. With Progmat Coin, the lender provides a secure solution that ensures stability and familiarity for users within the Japanese market.
MUFG will leverage Toki’s to enhance the transactional capabilities of its stable assets. The startup specializes in enabling asset transfers across various public blockchains such as Ethereum, Cosmos, Avalanche, and Polygon.
The new initiative builds upon the expertise of MUFG’s ST Research Consortium, which was formed four years ago with a focus on establishing security token standards. As part of its evolution, the consortium is now rebranded as the Digital Asset Co-creation Consortium to broaden its scope beyond security tokens. The consortium aims to innovate in various sectors, including stablecoins, non-fungible tokens (NFTs), crypto assets, and more.
Earlier in March, three Japanese banks announced plans to develop a payment system that integrates their stablecoins on a public blockchain while satisfying legal requirements.
Shortly after Japan overturned a ban on fiat-pegged cryptocurrencies, Tokyo Kiraboshi Financial Group, The Shikoku Bank, and Minna no Bank launched a stablecoin experiment. This initiative is powered by Web3 infrastructure provider GU Technologies, which develops a public blockchain that’s fully compatible with Ethereum, dubbed ‘Japan Open Chain’.
The trio cited few use cases and benefits, including general consumer use and business-to-business remittances. They also argue that each of the involved banks aims to issue and remit its own stablecoin that can be used in Ethereum wallets such as MetaMask while complying with Japan’s new fund settlement laws.
The recent legal revision in Japan primarily introduces a registration system for stablecoins circulation and reinforces anti-money laundering measures. Additionally, it enables overseas businesses to issue stablecoins in the country through custodians of digital assets.
