Mitsubishi UFJ Financial Group (MUFG), Japan's largest financial institution, is reportedly considering the issuance of a global stablecoin using its blockchain platform. The bank had previously announced plans to launch a token pegged to the value of the yen . Now, it is in Discussions with industry leaders to mint stablecoins tied to foreign currencies like the US dollar, utilizing its blockchain platform called Progmat, according to Tatsuya Saito, the vice president of product at MUFG.
MUFG is exploring potential partnerships with local financial institutions, entertainment companies, and non-financial businesses to facilitate the issuance of stablecoins. Saito also mentioned that foreign organizations have shown interest, indicating that Japan could become a global hub for stablecoin activity.
Given the scrutiny surrounding stablecoins in Japan, particularly after the UST stablecoin's collapse, the government has established regulations stating that stablecoins can only be issued by licensed banks, remittance agents, or trust companies. Saito praised this legislation, noting that it provides additional consumer protection and allows issuers and users to have confidence in stablecoin usage.
Under Prime Minister Fumio Kishida's leadership, the Japanese government has implemented favorable regulations that have allowed the local cryptocurrency industry to flourish. Last year, they approved policies aimed at boosting the country's Web3 industry.
Furthermore, prominent lobby groups have urged the government to reduce cryptocurrency taxation rates. If their recommendations are adopted, domestic companies holding cryptocurrencies for purposes other than short-term transactions may not be subject to taxes on paper gains. MUFG's trust banking unit initially expressed interest in stablecoins tied to Japan's official currency in February 2022.
Experts suggest that the issuance of a stablecoin by MUFG could enhance its payments network by enabling instant settlement of securities transactions. Currently, these procedures are costly and time-consuming, taking several days to complete.
