In a strategic collaboration, cryptocurrency exchange Binance joined forces with Japan’s largest bank, Mitsubishi UFJ Trust and Banking Corporation (MUTB), with the aim of exploring the issuance of stablecoins in Japanese territory.
On September 25, Binance Japan announced a joint initiative that aims to enable companies to issue yen and other fiat-backed stablecoins to drive Web3 adoption in Japan. Both entities plan to use a platform called “Progmat Coin”, which will function as a stablecoin issuance and management system in full compliance with Japanese regulations.
The Japanese bank will lead the development of the “Progmat Coin” platform as an infrastructure for the issuance of stablecoins, in compliance with Japan’s Payment Services Law, which was recently reviewed and implemented in June. This legislation gives Japanese banks and regulated cryptocurrency service providers the ability to issue stablecoins.
Although the platform will initially support the issuance of stablecoins on the Ethereum network, the possibility of expanding it to include BNB Chain is contemplated, by virtue of the collaboration with Binance, according to the company.
Takeshi Chino, CEO of Binance Japan, said in a statement that stablecoins play a critical role in the current financial landscape. In addition to providing a cheaper and faster way of settlement for companies’ cross-border trade transactions, they also simplify cryptocurrency transactions for retail investors.
According to Tatsuya Saito, vice president of products at MUFG, Japan’s stablecoin market has the potential to grow to $34 billion (5 trillion yen), which is equivalent to approximately 27% of the estimated global market size. current, which amounts to 123.7 billion dollars according to CoinGecko.
Despite increasing regulatory pressures in the West, Binance began operations in the Japanese market in August 2023, offering a total of 34 tokens.
For its part, Japan’s Orix Bank is considering plans to issue stablecoins in the country. It plans to test stablecoins backed by the yen, dollar and other currencies in October, with the possibility of launching them on the market in 2024. These stablecoins will be backed by fiat deposits and will use the Japan Open Chain blockchain, developed by the Tokyo-based company G.U. Technologies and its partners.
Japan appears to be in a strong position to implement stablecoins in its payment systems. In August, we reported that Japanese blockchain startup Soramitsu was exploring the creation of a new stablecoin exchange aimed at facilitating cross-border payments between Asian countries.
Earlier this month, the Japanese government expressed its intention to allow startups to raise public funds by issuing crypto assets and stablecoins.
(Referential image source: Kanchanara, Unsplash)