The Japanese banking giant Mitsubishi UFJ will join forces with one of the nation’s biggest crypto exchanges for a new stablecoin offering.
The bank will team up with Bitbank, one of Japan’s biggest and longest-running crypto exchange platforms.
The firms and their partners want to develop a stablecoin-powered settlements platform for crypto firms.
The bank has been keen to launch stablecoin services after the government earlier this year approved legislation that allows banks and other regulated, traditional financial institutions to launch, handle, and operate stablecoins.
Per an official release and a report from Nikkei, Mitsubishi UFJ (MUFJ)’s trust and banking arm will work on the project with a range of domestic crypto and Web3 firms.
The result, the firm claimed, will be the creation of a stablecoin-powered “international payment system.”
The platform is slated to roll out in 2024, and will involve issuing stablecoins that are pegged to the Japanese yen and the United States dollar.
MUFJ revealed that it is working with the Web3 provider Ginco on the platform construction, along with Progmat, the bank’s own stablecoin affiliate.
The megabank began piloting Progmat back in March this year, with a view to creating a system that will allow stablecoins on various blockchain protocols to interoperate.
MUFJ also said that it is planning to ask “other domestic and international [crypto] exchanges” to “participate” in its project. The crypto firms Cumberland DRW and Melcoin are already on board.
The bank said that it believes that its platform will allow users to “improve efficiency and reduce fees” when exchanging tokens with “overseas businesses.”
Japan’s Mitsubishi UFJ: Betting Big on Stablecoins?
MUFJ has developed its Progmat affiliate in conjunction with a number of smaller Japanese crypto players.
It has since spun the project off into a stand-alone company as the bank continues to make headway in the stablecoins space.
Progmat has received backing from several major Japanese companies, including a Nippon Telegraph and Telephone (NTT) subsidiary. NTT is Japan’s biggest telecoms provider.
A subsidiary of SBI, a major crypto and securities player with close ties to Ripple, has also invested in Progmat.
MUFJ and its partners intend to build their network around a yen-pegged stablecoin named “XJPY” and a dollar-pegged “XUSD” token.
The firm and its partners will pilot a “cross-industry” stablecoin-powered platform that will allow crypto exchanges to carry out more effective settlements.
The companies said that the new platform will allow exchanges to use stablecoins as a settlement tool with liquidity providers, instead of relying on conventional, fiat-powered bank transfers.
They added that bank transfer-related business is hamstrung by banks’ operating hours.
But stablecoin-powered alternatives are available “24 hours a day, 265 days a year,” they said.
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