Japan’s MUFG to Launch Bank-Backed Stablecoins on Numerous Public Blockchains

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Key Takeaways

  • Progmat Coin will facilitate the issuance of bank-backed stablecoins on various public blockchains, including Ethereum, Polygon, Avalanche, and Cosmos
  • MUFG is also working on launching its own Yen-pegged stablecoin

In an announcement made on June 2, Mitsubishi UFJ Financial Group (MUFG), Japan’s largest bank, disclosed its plans to utilize its stablecoin issuance platform-Progmat Coin to facilitate the issuance of bank-backed stablecoins on various public blockchains, including Ethereum, Polygon, Avalanche, and Cosmos.

This initiative aims to leverage the benefits of blockchain technology and provide a secure and efficient platform for stablecoin transactions. The Progmat Coin solution is not exclusive to MUFG but is designed to support stablecoin issuance from multiple trust banks. While the specific banks that will be the first to utilize Progmat Coin have not been disclosed by MUFG, the bank confirmed that it has been working on launching its own Yen-pegged stablecoin.

To enable seamless interoperability between different blockchains, MUFG is collaborating with its blockchain technology and security partners, TOKI and Datachain. Together, they are developing a bridge that will facilitate cross-chain transactions, lending, and swaps across the supported blockchains.TOKI will help MUFG by running liquidity pools with Progmat Coins on multiple blockchains

Reportedly, not every financial institution is keen on using Progmat coin for their stablecoin transactions. As per local media reports, Digital lender Minna Bank plans to issue its own stablecoin, along with Tokyo Kiraboshi Financial Group and Shikoku Bank.

The latest development comes amid Japan’s Financial Service Agency lifting the ban on foreign stablecoins. In mid-2022, Japan’s parliament passed a bill to ban stablecoin issuance by non-banking institutions. Later in 2022, the Financial Services Agency moved forward on lifting a ban on foreign-issued stablecoins.

MUFC introduced “Progmat Coin” in February 2022 with the aim to enable a “universal digital asset payment method,” providing cross-chain interoperability with offerings of a huge range of other digital assets other than those issued on Progmat, as well as Japan’s central bank issued digital currency, the digital yen.

As more banks explore the potential of stablecoins, it is expected that additional networks will be added to the Progmat Coin platform in the future, expanding the reach and accessibility of these bank-backed digital assets.

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Saniya Raahath
Saniya Raahath

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