Japan’s three major banks are reportedly collaborating to issue a yen-pegged stablecoin, marking a significant step in the region’s growing integration of cryptocurrency technology into its financial systems.
According to a report by Nikkei published on Friday, Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank intend to enhance corporate settlements and decrease transaction costs through a stablecoin initiative based on MUFG’s Progmat platform for stablecoin issuance.
The consortium, which services over 300,000 corporate clients, seeks to create a standardized token that will facilitate interoperability for payments among companies. They expect to launch the stablecoin by year-end.
Mitsubishi Corp. is set to be the first to utilize the stablecoin for internal transactions, streamlining international transfers related to dividends, acquisitions, and customer dealings while reducing fees and administrative complexities.
If successful, this undertaking could pave the way for Japan’s inaugural bank-backed stablecoin network operating under a unified system.
Cointelegraph attempted to reach MUFG, SMBC, and Mizuho for comments but received no response by the time of publication.
MUFG launched the Progmat stablecoin platform in June
This news follows the introduction of MUFG’s stablecoin issuance platform, “Progmat Coin,” in June. At that time, MUFG announced that banks in Japan would leverage the platform to issue yen-pegged stablecoins across various public blockchain networks.
MUFG indicated that Progmat Coin will facilitate the issuance of bank-backed stablecoins on Ethereum, Polygon, Avalanche, and Cosmos, with plans to integrate additional networks in the future.
On September 26, Binance Japan partnered with Mitsubishi UFJ Trust and Banking Corp. (MUTB) to explore stablecoin issuance utilizing Progmat Coin.
Binance Japan’s general manager, Takeshi Chino, emphasized that stablecoins are essential to the broader financial landscape, playing a critical role in financial services and being vital for Web3 adoption.
Related: Nomura moves to capture Japan’s booming institutional crypto market
Japan stablecoin race intensifies
The pursuit of stablecoin development by these banks follows increasing institutional interest in yen-pegged crypto assets.
In August, Nikkei reported that Japan’s Financial Services Agency (FSA) was getting ready to approve the issuance of yen-based stablecoins, with fintech company JPYC set to lead the rollout.
Simultaneously, Monex Group, based in Tokyo, also announced its intent to explore launching a stablecoin pegged to the Japanese yen.
As previously reported by Cointelegraph, Monex chairman Oki Matsumoto expressed concerns about the company being left behind if it did not engage in stablecoin development, although he acknowledged that the process could require considerable infrastructure and investment.
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