Mitsubishi UFJ Trust and Banking Corporation, Japan’s largest banking group, and Binance Japan, the local arm of the world’s biggest cryptocurrency exchange, have partnered to create fiat-pegged stablecoins. This collaboration utilizes the “Progmat Coin” platform, which is led by Mitsubishi’s trust bank and is dedicated to managing and issuing stablecoins. First introduced in February 2022, this platform’s goal is to facilitate the creation of Japanese Yen-pegged stablecoins on public blockchains.
Background on Stablecoins and Regulation
This collaboration is significant against the backdrop of evolving stablecoin regulations in Japan. Japanese regulators updated their stablecoin rules in June to align them with the rapidly changing cryptocurrency landscape.
These updates have created a conducive environment for financial institutions and technology companies to explore and develop stablecoin solutions.
Progmat’s Strong Backing
Progmat, the subsidiary behind the stablecoin platform, enjoys the support of a consortium of prominent local banks, including Mizuho Bank, SMBC, and SBI Holdings.
This backing not only adds credibility to the project but also reinforces the commitment of significant players in the Japanese financial industry towards embracing blockchain and digital currencies.
Stablecoin Variety and Impact
Mitsubishi UFJ and Binance Japan envision a future where various stablecoins, pegged to the Japanese yen and other major currencies, play a pivotal role in the broader financial ecosystem. These stablecoins hold immense promise, from facilitating cost-effective cross-border trade settlements for businesses to providing a seamless on and off-ramp for retail investors to trade various cryptocurrencies.
Optimism About the Future
Mitsubishi UFJ’s Vice President of Product and Founder of Progmat, Tatsuya Saito, expressed optimism about the partnership’s potential impact on advancing Web 3.0.
He emphasized the importance of having a highly secure stablecoin within this ecosystem, recognizing its immeasurable value in fueling the growth of blockchain-based Web 3.0 technologies, including cryptocurrencies, NFTs, and the metaverse.
Connecting Japan’s Real Economy with Crypto
Takeshi Chino, the General Manager of Binance Japan, highlighted the partnership’s crucial role in connecting Japan’s real economy, the blockchain space, and the global Binance ecosystem.
Stablecoins are seen as a bridge between traditional finance and the digital world, and they are poised to play an instrumental role in accelerating the adoption of cryptocurrencies in everyday financial transactions.
Timetable for Stablecoin Operations
According to a joint press release, both companies intend to commence stablecoin operations by the close of 2024. This timeline underscores their commitment to delivering secure and compliant stablecoin solutions to the market while allowing ample time for regulatory adjustments and technical developments.
Binance’s Return to Japan
Binance’s re-entry into the Japanese market on August 1, 2023, marks a significant step in the cryptocurrency exchange’s expansion strategy. This move follows a two-year hiatus, during which Binance received a warning from local financial regulators for failing to comply with registration requirements.
Binance’s acquisition of the regulated local platform Sakura Exchange BitCoin, which has been rebranded as Binance Japan, allowed it to offer 34 tokens, making it Japan’s largest exchange of token offerings. This includes Binance’s native token, BNB, which became available for trading in Japan.
Prime Minister’s Vision for “New Capitalism”
The developments in Japan’s cryptocurrency and blockchain landscape align with Prime Minister Fumio Kishida’s vision for “new capitalism.” In office since late 2021, Kishida actively supports digital finance and Web3 adoption in Japan, recognizing their potential to reinvigorate the country’s economy.
Web3 represents the latest wave of technological innovations that leverage blockchain technology and encompasses cryptocurrencies, NFTs, and the metaverse. Under Kishida’s leadership, Japan is positioning itself as a frontrunner in embracing these transformative technologies to fuel economic growth and innovation.
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