Cryptocurrency exchange Binance is partnering with Mitsubishi UFJ Trust Bank (MUTB), Japan’s largest bank, to explore the issuance of stablecoins in Japan.
On September 25, Binance Japan announced a joint study aimed at having the two companies issue Japanese yen and other fiat stablecoins to accelerate the adoption of Web3 in Japan. The two plan to utilize a platform called “Progmat Coin,” which will be a stablecoin issuance and management system that complies with Japanese regulations.
The Japanese bank will take the lead in developing the “Progmat Coin” platform as an infrastructure for issuing stablecoins in accordance with Japan’s recently revised and implemented Payment Services Act. The legislation, which came into effect in June, allows the Bank of Japan and regulated cryptocurrency providers to issue stablecoins.
Binance said in a statement that the platform supports stablecoin issuance on Ethereum, but may be expanded to include BNB Chain through a partnership with Binance.
Takeshi Chino, general manager of Binance Japan, said in a statement that stablecoins are crucial to the broader financial ecosystem. He added that in addition to providing low-cost and instant cross-border trade settlement for businesses, they also provide seamless cryptocurrency trading for retail investors.
Stablecoins fill an important financial services need and are critical to the successful adoption of Web3.
Tatsuya Saito, MUFG Vice President of Products, said that Japan’s stablecoin market has the potential to grow to US$34 billion (5 trillion yen). According to CoinGecko, this is equivalent to about 27% of the current estimated global market value of $123.7 billion.
Binance, which faces significant regulatory pressure in the West, began offering 34 tokens when it launched its service in the Japanese market in August 2023.
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Meanwhile, Japan’s Orix Bank is also reportedly considering plans to issue a stablecoin in the country.
Orix plans to begin testing Japanese yen, U.S. dollars, and other stablecoins in October, with plans to launch in 2024. They will be backed by fiat deposits, leveraging Japan’s OpenChain blockchain, developed by Tokyo-based GU Technologies and its partners.
Japan appears ready to launch a stablecoin for payment rails. In August, Cointelegraph reported that Japanese blockchain startup Soramitsu was exploring a new stablecoin exchange for cross-border payment systems in Asian countries.
Earlier this month, it was reported that the Japanese government plans to allow startups to raise public funds by issuing crypto assets and stablecoins.
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