Mitsubishi UFJ Trust and Banking (MUFG Bank), the largest bank by assets in Japan, has announced that it will issue a stablecoin tied to the Japanese Yen for trading and Payments purposes.
MUFG Bank Stablecoin to Settle Clear and Settle Digital Transactions
Mitsubishi UFJ Trust and Banking will issue the cryptocurrency in partnership with Japan’s SBI Group and Daiwa Securities. The stablecoin will be used to clear and settle digital securities on the SBI and SMBC digital securities that are planned to go live this year.
Currently, the settlement of securities transactions takes several days and is quite expensive. The new token promises to boost Japan’s Mitsubishi UFJ Bank’s payment promises and instantly carry out these monetary processes.
Nikkei reported on Monday that the Japanese bank plans to name the stablecoin Progmacoin and launch it in 2023. Apart from launching its stablecoin, MUFG Bank also plans to leverage blockchain technology for trading non-traditional securities like real estate and art.
Blockchain technology has made it possible to purchase small quantities of traditional investment vehicles such as real estate or corporate bonds. The move has opened up high-priced, less liquid assets to retail investors.
Talks on Crypto Regulation in Japan Likely to Increase
The cryptocurrency industry has been thriving in Japan. In 2021, digital transactions increased by 50% from the previous year to over $900 billion. The rapid growth of the industry has been attracting regulatory talks in Japan.
2020 saw the establishment of the Financial Services Agency (FSA), a division meant to oversee cryptocurrency regulation. With this new announcement from Mitsubishi UFJ Trust and Banking, regulators may want to accelerate their hold on cryptocurrency.
Last summer, there were talks from Japanese officials over stablecoins’ potential harm to Japan’s financial ecosystem. Thus, the officials thought it was dire to supervise the industry strictly.
Japan’s central bank is also working on issuing a CBDC. According to the timeline announced by Governor Haruhiko Kuroda, trials for the stablecoin will start this year, and the product’s final launch will take place in 2026.
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