Cryptocurrency exchange Binance has joined forces with Mitsubishi UFJ Trust Bank (MUTB), Japan's largest bank, to investigate the possibility of issuing stablecoins in Japan.
On September 25, Binance Japan revealed a collaborative study aimed at enabling both companies to issue Japanese yen and other fiat-backed stablecoins to boost the adoption of Web3 technology in Japan. They intend to leverage Progmat Coin, MUFG's stablecoin issuance platform.
MUTB will lead the development of the Progmat Coin platform, which will serve as the infrastructure for issuing stablecoins under Japan's recently revised and enacted Payment Services Act. This legislation, effective since June, permits the Bank of Japan and regulated cryptocurrency providers to issue stablecoins. Progmat Coin is designed to support stablecoin issuance on networks like Ethereum, Polygon, Avalanche, Cosmos, and BNB Chain.
Takeshi Chino, the General Manager of Binance Japan, emphasized the importance of stablecoins in the broader financial ecosystem. He noted that aside from offering low-cost and instant cross-border trade settlements for businesses, stablecoins also facilitate seamless cryptocurrency trading for retail investors.
Stablecoins fulfill a significant financial services role and are essential for the successful integration of Web3 technology.
MUFG's Vice President of Product, Tatsuya Saito, believes that the Japanese stablecoin market could grow to 5 trillion yen ($34 billion). According to CoinGecko, this represents approximately 27% of the current estimated global market value of $123.7 billion. Binance, facing substantial regulatory scrutiny in the Western markets, introduced 34 tokens when it launched its services in the Japanese market in August 2023.
Meanwhile, Orix Bank in Japan is reportedly considering plans to issue a stablecoin in the country. Orix plans to commence testing Japanese yen, US dollars, and other stablecoins in October, with an anticipated launch in 2024. These stablecoins will be backed by fiat deposits utilizing the Japan Open Chain blockchain developed by Tokyo-based GU Technology and its partners.
Japan seems poised to introduce a stablecoin for payment infrastructure. In August, Japanese blockchain startup Soramitsu was exploring a new stablecoin exchange for cross-border payment systems in Asian countries. Additionally, the Japanese government is purportedly planning to permit startups to raise public funds by issuing crypto assets and stablecoins.
