Mitsubishi UFJ Trust and Banking, Ginco, and Progmat have announced a collaborative study to create a “cross-crypto asset industry stablecoin.” The coins are expected to be released around the summer of 2024.
According to an official press release, the financial institutions along with Cumberland Global Limited, BitBank, and Mercoin will be joining the study as well. Eight companies have already signed the shareholder agreements.
The stablecoin will be observed by the companies to ensure it is strong enough to uphold main transactions and market trends. There will be two types of stablecoins issued. The “XJPY” will be linked to the Japanese Yen, while “XUSD” will be pegged against.
The official announcement states that the stablecoins will operate on Progmat Coin, a stablecoin issuance and management platform. This aims to allow businesses and individuals to easily access cross-border transactions in Japanese Yen.
MUFG had previously hinted at its plan to build a cross-chain infrastructure for stablecoins with Data Chain Co., Ltd. and TOKI FZCO. The banking group has now finally gathered major financial organizations to work together on XJPY and XUSD.
Yet, the question remains, when will we see the final launch of the much-awaited Japanese stablecoin?
Why is stablecoin important for Japan?
Stablecoin holds the key to contributing to the Japanese economy. Although stablecoin transactions are mainly done for fund settlements between crypto asset exchanges and liquidity providers, Japanese banks are looking to change this.
Businesses that predominantly rely on conventional banking methods for fund transfers will use stablecoins for faster and more effective. Currently, the banks can only do transfers during business hours but with stablecoins, the transactions will enable 24/7 transfers.
MUFG is dipping its toes to grab the opportunity to issue stablecoins pegged against the yen. It first developed the Progmat Coin platform, which later became an independent company in September.
How will this collaborative study work?
The above-mentioned image from the press release shows the division of each institution.
The new Japanese law on Payment Services Act issued in June defined three kinds of stablecoins: bank deposit, funds transfer, and trust.
XJPY and XUSD will be released on trust type as it gives a more flexible design. The institutions haven’t set any limit to stablecoin users and will invite other domestic and foreign digital currency exchanges to participate.