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Japan’s largest bank, Mistubishi UFG Trust, has teamed up with Binance Japan to launch a Yen-backed stablecoin offering.
Joint Consideration For New Stablecoin
Mitsubishi UFJ Trust and Banking, in conjunction with Binance Japan and Progmat, have embarked on the journey to explore the creation of a new stablecoin. The collaboration aims to leverage the evolving regulatory landscape surrounding stablecoins and tap into the potential of the Japanese market. The stablecoin, backed by Japanese yen and US dollars, is set to be issued on public blockchain networks like Ethereum and Polygon, adhering to Japanese regulations.
Under this regulatory framework, banks, trust companies, and transfer operators are permitted to issue stablecoins, marking a significant milestone. However, it’s worth noting that asset-circulating companies will still need a separate license to engage in stablecoin issuance.
Progmat Coin: The Core Of Collaboration
Mitsubishi’s Progmat platform aligns seamlessly with the Japanese government’s “Revised Funds Settlement Act,” passed in 2022, which formally recognizes stablecoins as a legitimate electronic payment method. The stablecoin issued will serve as the linchpin of Binance’s partnership with the global ecosystem and the Japanese market. The collaboration is in the midst of a joint study, inching closer to publication.
One notable advantage of this development is the ability for companies to streamline foreign trade transactions, bypassing Japan’s internal banking network. The announcement made in June further clarified that businesses can utilize the stablecoins issued through Progmat for various purposes, including the acquisition of non-fungible tokens (NFTs) and digital securities.
Binance Japan’s Ambitions
Binance Japan is set to commence its services for the Japanese market in August 2023, offering support for 34 crypto assets – making it the largest offering in Japan. The platform has expressed its intentions to gradually expand its services, aligning itself with its global counterpart, subject to the completion of necessary regulatory license registrations within Japan.
During an online business briefing in August, Binance Japan CEO Tsuyoshi Chino hinted at their involvement in the stablecoin venture. He also expressed his vision for Japanese yen-based stablecoins during an online business briefing in August. He acknowledged the challenges posed by Japanese regulations, emphasizing the high barrier to entry.
He said,
“Under Japanese regulations, stablecoin issuers are limited to banks, fund transfer companies, and trust companies.”
However, he also passionately articulated the potential of Japanese yen-based stablecoins for various use cases, including trade transactions and digital securities.
The introduction of stablecoins into the Japanese market is expected to drive diversification and efficiency within the financial services sector. This initiative holds the potential to enhance the competitiveness of the market as a whole.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
