Three of Japan's largest banks are reportedly planning to jointly issue a yen-pegged stablecoin, contributing to the increasing adoption of crypto technology within the region's financial infrastructure.
Nikkei reported on Friday that Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC) and Mizuho Bank plan to modernize corporate settlements and reduce transaction costs using a yen-based stablecoin project built on MUFG's Progmat stablecoin issuance platform.
The banks, which together serve greater than 300,000 corporate customers, wish to standardize the token to make it interoperable for payments inside and between firms. The consortium expects to launch the stablecoin by the tip of the 12 months.
Mitsubishi Corporation will probably be the primary company to launch the stablecoin for internal settlements. With over 240 subsidiaries worldwide, the corporate strives to streamline international transfers of dividends, acquisitions and customer transactions, thereby saving fees and administrative burdens.
If successful, the project could construct Japan's first bank-backed stablecoin network under a unified framework
Cointelegraph reached out to MUFG, SMBC and Mizuho for comment but didn’t receive a response via publication.
MUFG launched the stablecoin platform Progmat in June
The news follows the launch of MUFG’s stablecoin issuance platform “Progmat Coin.” In June, MUFG announced that banks in Japan would use the platform to issue yen-pegged stablecoins on multiple public blockchain networks.
MUFG said on the time that Progmat Coin can be used to facilitate the issuance of bank-backed stablecoins on Ethereum, Polygon, Avalanche and Cosmos. The bank said it plans so as to add more networks in the long run.
On September 26, Binance Japan collaborated with Mitsubishi UFJ Trust and Banking Corporation (MUTB) to explore stablecoin issuance using Progmat Coin.
Takeshi Chino, general manager of Binance Japan, said that stablecoins are crucial to the broader financial ecosystem and that these assets play a crucial role in financial services and are crucial to the adoption of Web3.
Japan's stablecoin competition is heating up
Banks' stablecoin efforts follow institutional momentum in yen-pegged cryptoassets.
In August, Nikkei reported that Japan's Financial Services Agency (FSA) was preparing to approve the issuance of yen-based stablecoins. According to the report, Tokyo-based fintech firm JPYC will lead the stablecoin launch.
That same month, Tokyo-based financial services firm Monex Group also announced that it was considering launching a stablecoin pegged to the Japanese yen.
As Cointelegraph previously reported, Monex Chairman Oki Matsumoto said that the corporate risks falling behind if it doesn’t switch to stablecoins. However, he also acknowledged that the issuance may require significant infrastructure and capital.
