To study the issuance of stablecoins in Japan, the world’s largest cryptocurrency exchange Binance has teamed up with the Mitsubishi UFJ Trust and Banking Corporation (MUTB), the country’s biggest bank. To promote the adoption of Web3 technology in Japan, this strategic agreement, which was launched on September 25th, aims to produce Japanese yen and other fiat-backed stablecoins. In this essay, we examine the specifics of this trailblazing project and its possible effects on the cryptocurrency scene in Japan and beyond.
Binance The announcement by Japan of a collaborative research with MUTB is an important turning point in the nexus between conventional finance and cryptocurrency. This partnership’s main goal is to use Progmat Coin, MUTB’s stablecoin issuing technology, to create a stablecoin ecosystem in Japan.
Banks and authorized cryptocurrency providers now have the right to produce stablecoins under Japan’s newly updated Payments Services Act. The foundation of this new financial environment is set to be Progmat Coin, which was created to facilitate stablecoin issuance on a variety of blockchain networks, including Ethereum, Polygon, Avalanche, Cosmos, and BNB Chain.
The Vital Role of Stablecoins in Finance
Takeshi Chino, General Manager of Binance Japan, highlighted the vital role stablecoins play in the broader financial ecosystem. Beyond enabling cost-effective and instant cross-border trade settlements for businesses, stablecoins also streamline crypto transactions for retail investors. With their price stability and ease of use, stablecoins are ushering in a new era of financial inclusivity and efficiency. The collaboration between Binance and MUTB is not merely a technological endeavor; it’s a significant step toward democratizing finance in Japan.
Tatsuya Saito, Vice President of Product at MUFG, believes that Japan’s stablecoin market has immense growth potential, projecting it to reach as much as 5 trillion yen (approximately $34 billion). This projection accounts for a substantial portion, roughly 27%, of the current global stablecoin market, which stands at $123.7 billion according to CoinGecko. These numbers underscore the immense opportunities that await in the stablecoin space, as they continue to disrupt and innovate the financial landscape.
Japan’s Stance on Stablecoins and the Road Ahead
Japan’s proactive approach to stablecoins positions the country as a significant player in the emerging digital finance ecosystem. Beyond the Binance-MUTB partnership, other financial institutions, like Orix Bank, are also exploring stablecoin issuance in Japan. Orix aims to commence testing yen, U.S. dollar, and other stablecoins in October, with an eye on a 2024 launch. These stablecoins will be backed by fiat deposits utilizing the Japan Open Chain blockchain, developed by Tokyo-based G.U. Technologies and its partners.
Moreover, the Japanese government is reportedly considering allowing startups to raise public funds through the issuance of crypto assets and stablecoins. This forward-thinking regulatory framework suggests that Japan is well-positioned to harness the potential of stablecoins for transforming its payment rails and fostering innovation in the fintech sector.
In conclusion, the collaboration between Binance and Mitsubishi UFJ Trust represents a significant stride toward the widespread adoption of stablecoins in Japan. As the stablecoin market continues to grow globally, Japan’s efforts in this space may serve as a blueprint for other nations looking to bridge the gap between traditional finance and the blockchain revolution. This partnership highlights the evolution of finance as we know it and underscores the transformative power of cryptocurrencies in shaping the future of the financial industry.
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