Japan’s largest bank, Mitsubishi UFJ Financial Group Inc. (MUFG), is reportedly in talks with multiple parties to issue global stablecoins. This is in line with the bank’s attempt to leverage blockchain technology to enhance its operations and increase efficiency.
The move is favored by Japan’s recent stablecoin bill, which allows licensed banks, trust companies, and registered money transfer agents in the country to issue stablecoins, which it describes as “digital money”.
The bill also provides that all stablecoins be pegged to the Yen or another legal tender and guarantee holders the right to redeem them at face value, but doesn’t say anything about existing stablecons such as USDT issued by Tether.
According to a tweet on 23 June, by a blockchain enthusiast known on Twitter as Kunal, the bank will leverage the Progmat blockchain to start minting tokens seamlessly. The bank is currently in talks with multiple parties to commence work on the project.
The Vice President of Product at MUFG, Tatsuya Saito in an interview with Bloomberg said the project will bring confidence and security to both stablecoin issuers and users alike. The bank also intends to use the medium to offer stability, security, and scalability for both retail and institutional customers.
MUFG Adapting to Changing Financial Trends
Several governments and mainstream financial institutions have demonstrated resistance against cryptocurrencies. Many have either called for an utter ban on such cryptocurrencies, or for serious regulatory measures to be taken, especially for stablecoins.
However, MUFG has demonstrated that it is willing to embrace cryptocurrencies rather than fight the industry. This is part of the bank’s strategy to adapt to the changing financial industry which is currently tilting towards cryptocurrencies.
By issuing stablecoins, the bank is taking the responsibility for securing the financial setting rather than leaving it to random issuers. This is because stablecoins have continued to increase in popularity over the years, because of the ease of use and relative stability, unlike regular cryptocurrencies.
Despite efforts by central banks to discourage the trend, stablecoins are becoming central when it comes to financial transactions, hence the need to participate in growing the industry to fully benefit from it. According to Saito, the bank is considering the use of its Progmat blockchain as a platform for issuing stablecoins for third party issuers as well.
Japan Leading in Crypto Innovation
Japan has been one of the most friendly countries towards cryptocurrencies, thanks to its legislation. This makes it one of the best destinations in the world for developing crypto. With the largest bank in the country embracing stablecoins, it is likely that industry will see further growth in Japan in the near future.
This can easily make the country one of the budding crypto havens where crypto companies can go to thrive, unlike hostile countries like the US.