Megabank Mitsubishi UFJ Financial Group (MUFG) has announced its stablecoin issuance platform “Progmat Coin” will soon be used by banks in Japan to launch Japanese yen-pegged stablecoins on several public blockchains.
Japanese banks have recently outlined intentions to either look into or launch stablecoins following new regulations that came into effect this month.
In mid-2022, the Japanese government passed a bill prohibiting the issuance of stablecoins by non-banking institutions. The bill officially came into effect on June 1, 2023.
In a June 2 announcement, MUFG outlined the Progmat Coin will be used to facilitate the issuance of bank-backed stablecoins on Ethereum, Polygon, Avalanche and Cosmos, with more networks to be added in the future.
MUFG also revealed that its blockchain tech and security partners Toki and Datachain are building a bridge to enable cross-chain transactions, lending and swaps between the supported blockchains.
The bank expects the cross-chain infrastructure to be launched in the second quarter of 2022.
Progmat Coin cross-chain interopability. Source: MUFGMUFG initially announced Progmat Coin in February 2022, aiming to provide an interoperable and “universal digital asset payment method” for stablecoins, other crypto assets, and even a Japan-based central digital bank currency.
MUFG has not revealed which banks will be the first to utilize Progmat Coin; however, it confirmed to Cointelegraph at the time of its 2022 announcement that it is working on launching its own Japanese yen-pegged stablecoin.
According to a June 1 report from Nikkei Asia, Shikoku Bank, Tokyo Kiraboshi and Minna Bank all plan to issue stablecoins; however, it appears they won’t be using the Progmat Coin platform to do so.
The publication states these banks will use a separate stablecoin platform developed by Tokyo-based startup G.U. Technologies.