MUFG Partners with Progmat Coin to Enable Japanese Bank-Backed Stablecoins

Mitsubishi UFJ Financial Group (MUFG), a prominent megabank, has announced that it will utilize its stablecoin issuance platform called “Progmat Coin” to facilitate the launch of Japanese yen-pegged stablecoins on various public blockchains in Japan. This move comes as Japanese banks express their interest in exploring or introducing stablecoins following the implementation of new regulations this month.

The Japanese government recently passed a bill prohibiting non-banking institutions from issuing stablecoins, which officially took effect on June 1, 2023. MUFG disclosed in a statement on June 2 that Progmat Coin will be employed to enable the issuance of bank-backed stablecoins on Ethereum, Polygon, Avalanche, and Cosmos. Additionally, the platform plans to incorporate more networks in the future.

Furthermore, MUFG unveiled its collaboration with Toki and Datachain, its blockchain technology and security partners, to construct a bridge that facilitates cross-chain transactions, lending, and swaps among the supported blockchains. The bank anticipates the launch of this cross-chain infrastructure in the second quarter of 202.

Progmat Coin was initially introduced by MUFG in February 2022 with the aim of providing an interoperable and “universal digital asset payment method” for stablecoins, other cryptocurrencies, and even a digital currency issued by the central bank of Japan.

While MUFG has not disclosed the identities of the banks that will be the first to utilize Progmat Coin, the bank confirmed its intention to launch its own Japanese yen-pegged stablecoin at the time of the 2022 announcement.

According to a report from Nikkei Asia on June 1, Shikoku Bank, Tokyo Kiraboshi, and Minna Bank have expressed their plans to issue stablecoins. However, it appears that these banks will not be utilizing the Progmat Coin platform for their stablecoin initiatives. Instead, they are expected to rely on a separate stablecoin platform developed by G.U. Technologies, a Tokyo-based startup.

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