Mitsubishi UFJ, the colossal Japanese banking institution, has formed an alliance with a prominent national cryptocurrency exchange. Together, they aim to inaugurate a groundbreaking stablecoin endeavor. This partnership brings Mitsubishi UFJ into collaboration with Bitbank, a venerable and substantial Japanese crypto exchange platform.
Their shared ambition is to engender a settlement infrastructure empowered by stablecoins for the realm of cryptocurrency.
The impetus for this strategic move is rooted in recent governmental approvals. Consequently, these approvals accord banking institutions and established financial entities the license to issue, manage, and transact stablecoins.
According to an official announcement and a report from Nikkei, Mitsubishi UFJ (MUFJ) will delegate the onus of this project to its trust and banking division.
Furthermore, they will align with an array of domestic cryptocurrency and Web3 enterprises. The ultimate aspiration of this venture is to fabricate an international payment mechanism driven by stablecoins.
Mitsubishi UFJ’s Pioneering Platform for Cross-Border Stablecoin Innovation
This cutting-edge platform is slated to go live in the year 2024. In addition, it will include the issuance of stablecoins linked to the Japanese yen and the United States dollar.
Moreover, MUFJ has disclosed its cooperation with the Web3 service provider, Ginco, for the construction of this pioneering platform. Furthermore, Progmat, an affiliate in the stablecoin domain owned by the bank, is integral to the project.
The origins of Progmat trace back to March of the current year, when MUFJ commenced its pilot phase. Their goal is to design a system that facilitates interoperability among stablecoins operating on diverse blockchain protocols. Moreover, MUFJ has expressed its intent to invite “other national and international cryptocurrency exchanges” to “participate” in this initiative.
Cumberland DRW and Melcoin, two prominent crypto entities, have already embarked on this journey. MUFJ envisions that their platform will be a catalyst for enhancing efficiency and diminishing fees for users engaged in token exchanges with “foreign commercial enterprises.”
Mitsubishi UFJ and Partners Forge Path for Stablecoin Innovation in Japan’s Cryptocurrency Landscape
MUFJ has shaped its Progmat subsidiary through collaborative efforts with several minor players in the Japanese cryptocurrency sphere. As the bank advances in the realm of stablecoins, it has transformed the Progmat project into an independent entity.
Notably, significant Japanese corporations, including a subsidiary of Nippon Telegraph and Telephone (NTT), the premier telecommunications giant in Japan, have made investments in Progmat.
Another notable investor is an SBI subsidiary, a substantial participant in cryptocurrency and securities with close affiliations to Ripple. Additionally, MUFJ and its allies aspire to establish a network based on a yen-pegged stablecoin dubbed “XJPY” and a dollar-pegged token christened “XUSD.”
This collective is set to initiate a cross-industry stablecoin-fueled platform that will augment the efficiency of cryptocurrency exchanges in executing settlements.
The coalition asserts that this novel platform will allow exchanges to deploy stablecoins as an instrument for settlements with liquidity providers, eliminating the need for conventional fiat-based bank transfers.
They contend that conventional bank transfers are confined by the operating hours of banks, whereas stablecoin-powered alternatives are accessible “24 hours a day, 265 days a year.”
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