Japan’s largest bank, Mitsubishi UFJ Financial Group (MUFG), has announced its stablecoin issuance platform, Progmat Coin, which several Japanese banks will soon utilize to launch Japanese yen-pegged stablecoins on multiple public blockchains. This move comes as new regulations have opened avenues for trust banks to explore stablecoin offerings.
MUFG’s Progmat Coin to facilitate stablecoin issuance
MUFG revealed that Progmat Coin would serve as the backbone for issuing bank-backed stablecoins on Ethereum, Polygon, Avalanche, and Cosmos, with plans to incorporate more networks in the future. The platform aims to provide a universal digital asset payment method for stablecoins, other cryptocurrencies, and even a Japan-based central bank digital currency (CBDC). It offers support for security and utility tokens, with potential cross-bridge functionality.
The bank has also partnered with Toki and Datachain, collaborating on a cross-chain bridge solution to enable cross-chain swaps, payments, and lending between supported blockchains. The infrastructure is set to launch in the second quarter of 2022, offering users increased flexibility and interoperability within the stablecoin ecosystem.
The new legislation implemented in Japan in June 2023 allows trust banks, including MUFG, to issue stablecoins. This regulatory change has prompted Japanese banks to explore stablecoin initiatives. MUFG’s Progmat Coin aims to capitalize on this evolving landscape and provide a secure and compliant platform for stablecoin issuance.
While MUFG has not disclosed which banks will be the first to utilize Progmat Coin, it has confirmed that it is developing its Japanese yen-pegged stablecoin. However, other banks such as Shikoku Bank, Tokyo Kiraboshi, and Minna Bank plan to issue stablecoins using a separate stablecoin platform developed by Tokyo-based startup G.U. Technologies.
MUFG’s foray into cross-chain infrastructure and stablecoin issuance signifies a growing trend in the cryptocurrency industry. The move highlights the potential of stablecoins as a viable payment method and the need for interoperability across different blockchains.
The collaboration with Toki and Datachain aims to enable seamless cross-chain transactions, paving the way for innovative use cases such as settling NFT purchases with Progmat Coin on different blockchains. Furthermore, the involvement of prominent stock exchange operators, including JPX, Mizuho, SMBC, and SBI, suggests a growing interest and support for digital assets and blockchain technology in Japan.
As stablecoin adoption gains traction and regulations evolve, it becomes increasingly important for banks and financial institutions to explore the potential of digital currencies and their integration into traditional financial systems. MUFG’s Progmat Coin platform is an essential step in this direction, providing a secure and compliant solution for stablecoin issuance and facilitating the growth of digital asset ecosystems.