Three of Japan’s largest financial institutions are reportedly working together to issue a stablecoin pegged to the yen, marking a significant step in the integration of cryptocurrency into the country’s financial sector.
Nikkei reported that the collaboration involves Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank, aiming to utilize MUFG’s Progmat platform for enhancing corporate settlements and trimming transaction costs through this yen-based stablecoin initiative.
These banks collectively cater to over 300,000 corporate customers and intend to create a standardized token that facilitates seamless payments within different companies. The consortium aspires to launch the stablecoin by year’s end.
Mitsubishi Corp. has been named the first organization to adopt this stablecoin for internal transactions. It plans to optimize international payments related to dividends, acquisitions, and client dealings, thereby reducing fees and administrative tasks.
If this initiative proves successful, it could lay the foundation for Japan’s inaugural bank-backed stablecoin network organized under a singular framework.
MUFG’s Stablecoin Initiative
The news comes shortly after MUFG launched the Progmat stablecoin platform in June, which banks can utilize to issue yen-pegged stablecoins across various public blockchain networks. MUFG disclosed that Progmat Coin would enable the issuance of bank-supported stablecoins on platforms such as Ethereum, Polygon, Avalanche, and Cosmos, with intentions to expand to more networks in the future.
On September 26, Binance Japan allied with Mitsubishi UFJ Trust and Banking Corp. (MUTB) to explore stablecoin issuance through Progmat Coin. Chino emphasized the importance of stablecoins within the broader financial landscape, stating they play a crucial role in effective financial services and are essential for the adoption of Web3 technologies.
Increasing Efforts in the Stablecoin Space
These efforts by the banks come amid a push for yen-pegged cryptocurrencies. In August, the Japan Financial Services Agency (FSA) was reported to be on the verge of sanctioning the rollout of yen-based stablecoins, with the Tokyo-focused fintech firm JPYC poised to spearhead the deployment.
Monex Group, another Tokyo-based financial services provider, has expressed intentions to launch its own yen-pegged stablecoin. Monex’s chairman, Oki Matsumoto, cautioned about the necessity of entering the stablecoin market to avoid obsolescence, even while acknowledging the potential challenges of infrastructure and funding needed for such a venture.
