Three major banks in Japan are reportedly planning to collaborate on the issuance of a yen-pegged stablecoin, furthering the region’s adoption of cryptocurrency technology within its financial systems.
Nikkei reported on Friday that the Mitsubishi UFJ Financial Group (MUFG), Bank Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank intend to enhance corporate transactions and lower transaction costs through a yen-based stablecoin initiative using MUFG’s stablecoin platform, Progmat.
These banks, serving over 300,000 corporate clients, plan to unify the token to ensure compatibility for payments among businesses. The consortium anticipates launching the stablecoin by year-end.
Mitsubishi Corporation will be the first to utilize the stablecoin for its internal transactions. With more than 240 subsidiaries worldwide, the corporation seeks to optimize international transfers related to dividends, acquisitions, and customer dealings, reducing fees and administrative hurdles.
A successful launch could create Japan’s first bank-supported stablecoin network under a consolidated framework.
Cointelegraph reached out to MUFG, SMBC, and Mizuho for comments, but had not received a reply by the time of publication.
MUFG launched the Progmat stablecoin platform in June
This development follows MUFG’s launch of the “Progmat Coin” stablecoin platform in June. They announced that this platform would enable banks in Japan to issue yen-pegged stablecoins across various public blockchain networks.
MUFG stated that Progmat Coin would facilitate the issuance of bank-supported stablecoins on Ethereum, Polygon, Avalanche, and Cosmos, with plans for more networks to be added in the future.
On September 26, Binance Japan partnered with Mitsubishi UFJ Trust and Banking Corporation (MUTB) to investigate the issuance of stablecoins utilizing Progmat Coin.
Binance Japan’s general manager, Takeshi Chino, remarked that stablecoins are essential to the wider financial ecosystem and play a crucial role in financial services and Web3 adoption.
Related: Nomura moves to capture Japan’s booming institutional crypto market
Japan stablecoin race intensifies
The banks’ stablecoin initiatives come in response to growing institutional interest in yen-pegged crypto assets.
In August, Nikkei reported that Japan’s Financial Services Agency (FSA) is planning to approve the issuance of yen-based stablecoins, with the Tokyo-based fintech company JPYC leading the rollout.
Additionally, during the same month, Tokyo-based Monex Group announced its consideration of launching a stablecoin linked to the Japanese yen.
As previously reported by Cointelegraph, Monex Chairman Oki Matsumoto expressed that the company could fall behind if it did not engage with stablecoins, although he acknowledged that launching them may require considerable infrastructure and investment.
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