2023-06-23 03:43:50 ET
Japan
’s leading bank Mitsubishi UFJ Financial Group (MUFG), plans to issue global
stablecoins
tied to foreign currencies (including the United States dollar). The financial giant will mint the coins through its Progmat platform.
As Japan’s stablecoin law went live on 1 June, authorized money transfer agents and banks can offer fiat-backed stablecoins.
The latest move establishes Japan as a global hub for issuing stablecoins, bolstering the growth of decentralized internet and
web3
companies. The nation will likely explore lucrative opportunities within this digital space.
Stablecoin transparency in Japan
Stablecoins are crucial in the
cryptocurrency markets
, allowing investors to hold money when interacting with more volatile digital assets. Backed by reserves such as bonds and cash, stablecoins often tie to $1.
Nonetheless, stablecoin has periodically agitated market players by losing their pegs. For instance, TerraUSD crashed in May 2022, wiping out approximately $40 billion of investor wealth.
As Binance US presided Brian Shroder
predicted
, Terra’s crisis saw increased
cryptocurrency regulation
, scrutinizing the stablecoins sector. Japan’s law promises stability and security, offering stablecoins backed by fiat in matching currencies.
MUFG targets global collaboration
The leading lender communicates with global stablecoin issuers, inviting them to mint coins through its Progmat platform. With such a move, MUFG plans to issue stablecoins connected to foreign currencies, including the United States dollar, for worldwide use.
The collaborations will cement Japan’s position within the stablecoin sector. Besides stablecoins, MUFG explores security token issuance via the Progmat network. Such developments confirm how versatile
blockchain
technology can be in the financial world.
While the bank doesn’t plan to launch its stablecoins, it advises Japanese entertainment firms, non-financial businesses, and financial institutions to adopt the assets.
Japan as a global stablecoin hub
Considering inquiries from global financial groups, Japan has what it takes to build itself as a stablecoin hub. Creating stablecoins tied to international currencies, such as the United States dollar, without compromising regulations opens lucrative opportunities for global players.
Japan’s supportive laws and increasing interest from worldwide participants form a friendly atmosphere for stablecoin innovation.
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Japan’s largest bank MUFG to issue stablecoins tied to foreign currencies
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