Mitsubishi UFJ Trust Bank and Binance Japan Collaborate on New Stablecoin Venture

Mitsubishi UFJ Trust Bank has announced a strategic collaboration with Binance Japan and Progmat to explore the creation of a new stablecoin. The stablecoin project aims to leverage Progmat Coin infrastructure, which complies with Japanese regulations, to facilitate the issuance and management of a stablecoin that will not only be linked to the Japanese yen (JPY) but also to foreign currencies like the United States dollar (USD).

This revelation, reported by the Nikkei, comes amid a growing interest in the issuance of stablecoins in Japan, with several financial institutions, including Orix Bank, reportedly considering similar ventures to be launched after 2024.

The introduction of stablecoins into the Japanese market has the potential to catalyze diversification and efficiency in financial services, enhancing the overall competitiveness of the market. Furthermore, it aligns well with the Japanese government’s Web3 policy initiative. Mitsubishi UFJ Trust Bank has been at the forefront of developing infrastructure for stablecoin issuance in accordance with the amended Fund Settlement Act, implemented in June 2023.

Utilizing the Progmat Coin foundation, the bank aims to issue stablecoins on various chains, including Ethereum (ETH), while also fostering smooth inter-transfer and exchange mechanisms. Additionally, the bank has announced various technological partnerships. Once intermediaries utilizing the Progmat Coin infrastructure complete their license registration with the relevant authorities, the issuance and circulation of stablecoins are expected to commence.

On the other side of this collaboration, Binance Japan has already made significant strides in the Japanese cryptocurrency market. In August 2023, the company launched services catering to the domestic market, offering trading for a staggering 34 cryptocurrencies. Binance’s global platform, known for being one of the world’s largest cryptocurrency exchanges, handles over 350 cryptocurrencies and serves a user base exceeding 150 million worldwide.

Binance Japan has expressed its intention to gradually expand its services to be on par with its global counterpart, pending the completion of the necessary regulatory license registrations in Japan. During an online business briefing in August, Tsuyoshi Chino, the representative of Binance Japan, hinted at their involvement in the stablecoin venture.

Chino acknowledged the regulatory hurdles for stablecoin issuers in Japan, which are limited to “banks, fund transfer providers, and trust companies.” However, he expressed optimism about overcoming these challenges through collaboration with Mitsubishi UFJ Trust Bank.

He passionately discussed the potential for Japanese yen-based stablecoins to circulate not only in the cryptocurrency demand sector but also in various use cases such as trade transactions and security tokens (digital securities). To handle stablecoins in Japan, obtaining the “Electronic Payment Method Transaction Business” license, newly established under the amended Fund Settlement Act, is mandatory. Taking into account the licensing process, Binance Japan aims to launch its stablecoin by 2024.

This partnership between Mitsubishi UFJ Trust Bank and Binance Japan represents a significant step towards the mainstream adoption of stablecoins in Japan, potentially revolutionizing the country’s financial landscape and aligning with the global trend towards digital currencies and blockchain technology.

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