In a groundbreaking collaboration, cryptocurrency exchange giant Binance has joined forces with Japan’s largest bank, the Mitsubishi UFJ Trust and Banking Corporation (MUTB), to explore the issuance of stablecoins in the Land of the Rising Sun. This strategic alliance, announced on September 25, is poised to play a pivotal role in accelerating the adoption of Web3 technology in Japan.
The Drive Behind Stablecoins in Japan
Stablecoins have emerged as a driving force in the realm of cryptocurrencies, offering stability and reliability in an otherwise volatile landscape. The joint endeavor by Binance and MUTB aims to leverage these attributes to enhance cross-border trade settlement for businesses while providing seamless crypto transactions for retail investors.
The Progmat Coin Platform: A Game-Changer
One of the key components of this initiative is the Progmat Coin platform, which will be utilized by the Mitsubishi UFJ Trust and Banking Corporation. This platform is set to pioneer the development of stablecoins under Japan’s recently revised and enforced Payments Services Act. The legislation, which came into effect in June, marks a significant milestone by allowing Japanese banks and regulated crypto providers to issue stablecoins.
A Multifaceted Approach to Stablecoin Issuance
Progmat Coin is designed to support stablecoin issuance across multiple networks, including Ethereum, Polygon, Avalanche, Cosmos, and BNB Chain. This multi-network approach is a testament to the versatility and adaptability of the stablecoin concept, catering to various blockchain ecosystems.
The Potential of Japan’s Stablecoin Market
Tatsuya Saito, the Vice President of Product at MUFG, believes that Japan’s stablecoin market has the potential to grow to a staggering 5 trillion yen (approximately $34 billion). This projection equates to around 27% of the estimated current global stablecoin market, which stands at $123.7 billion according to CoinGecko. The Japanese stablecoin market’s immense growth potential showcases the demand for stability and trust in digital currencies.
Expanding Cryptocurrency Offerings in Japan
Amidst growing regulatory pressures in the Western world, Binance made a significant move by offering 34 tokens when it launched its services in the Japanese market in August 2023. This expansion of cryptocurrency offerings demonstrates the exchange’s commitment to serving the Japanese crypto community.
Other Players in the Japanese Stablecoin Arena
Binance and MUFG are not the only players eyeing the Japanese stablecoin market. Orix Bank, another major financial institution in Japan, is reportedly considering plans to issue stablecoins. Their initiative includes testing stablecoins denominated in yen, United States dollars, and other currencies in October, with a prospective launch in 2024. These stablecoins will be backed by fiat deposits, utilizing the Japan Open Chain blockchain developed by Tokyo-based G.U. Technologies and its partners.
Japan’s Proactive Approach to Stablecoins
Japan’s forward-thinking stance on stablecoins extends beyond the private sector. In August, it was reported that Japanese blockchain startup Soramitsu was exploring a stablecoin exchange as part of a cross-border payment system for Asian countries. Additionally, the Japanese government is reportedly planning to permit startups to raise public funds by issuing crypto assets and stablecoins, further cementing Japan’s role as a trailblazer in the world of digital finance.
Conclusion: The Future of Stablecoins in Japan
The collaboration between Binance and the Mitsubishi UFJ Trust and Banking Corporation represents a significant step forward in the adoption of stablecoins in Japan. With the Progmat Coin platform and the potential for substantial market growth, Japan is poised to become a hub for stablecoin innovation. As these developments unfold, it’s clear that stablecoins are not just a passing trend but a transformative force in the financial ecosystem. Japan is embracing this transformation with open arms, setting the stage for an exciting future in the world of cryptocurrencies.
