Binance and Mitsubishi UFJ Trust and Banking Corporation (MUTB) are partnering to explore the issuance of stablecoins in Japan. The collaboration aims to accelerate the adoption of Web3 technology in Japan by issuing yen and other fiat stablecoins. The companies plan to utilize a platform called “Progmat Coin,” which is a regulatory-compliant stablecoin issuance and management system.
The Japanese bank, MUTB, will pioneer the development of the Progmat Coin platform as infrastructure for issuing stablecoins in accordance with Japan’s recently revised and enforced Payments Services Act. This legislation, which took effect in June, allows Japanese banks and regulated crypto providers to issue stablecoins.
The platform currently supports stablecoin issuance on Ethereum, but there are plans to expand it to include the BNB Chain through the partnership with Binance. Stablecoins are digital currencies that aim to maintain a stable value by pegging them to a reserve asset, such as a fiat currency like the yen or the US dollar.
Stablecoins play a vital role in the broader financial ecosystem, according to Takeshi Chino, the general manager of Binance Japan. They provide lower-cost and instantaneous cross-border trade settlement for businesses, as well as seamless crypto transactions for retail investors. Chino emphasizes that stablecoins are crucial for the success of Web3 adoption.
According to Tatsuya Saito, MUFG’s vice president of product, Japan’s stablecoin market has the potential to grow to as large as $34 billion (5 trillion yen). This represents around 27% of the estimated current global stablecoin market, which is valued at $123.7 billion, according to CoinGecko.
Binance, which has faced significant regulatory pressure in the West, recently launched its services in the Japanese market, offering 34 tokens. Meanwhile, another Japanese bank, Orix Bank, is reportedly considering plans to issue stablecoins in Japan. Orix aims to test yen, dollar, and other stablecoins in October with a planned launch in 2024. These stablecoins will be backed by fiat deposits utilizing the Japan Open Chain blockchain developed by G.U. Technologies and partners.
Japan is positioning itself as a hub for stablecoin payment rails. In August, Japanese blockchain startup Soramitsu announced plans to establish a stablecoin exchange for a cross-border payment system in Asian countries. Additionally, the Japanese government has expressed its intention to permit startups to raise public funds through the issuance of crypto assets and stablecoins.
The partnership between Binance and MUTB is expected to drive the adoption of stablecoins in Japan, offering benefits for businesses and retail investors alike. As Japan continues to pave the way for stablecoin innovation, it could become a major player in the growing global stablecoin market.