Japan’s megabank, Mitsubishi UFJ Financial Group (MUFG), has unveiled its stablecoin issuance platform, Progmat Coin, which aims to enable local bank-backed stablecoins on multiple public blockchains such as Ethereum, Avalanche, Cosmos, and Polygon. With new legislation in place this month, Japanese trust banks are now allowed to issue stablecoins.
Progmat Coin is designed to support stablecoin issuance from various trust banks, not just MUFG. To achieve this, the bank is partnering with blockchain interoperability startup DataChain and collaborating with TOKI, a cross-chain bridge solution for public blockchains that uses DataChain’s technology. The goal is to facilitate public blockchain cross-chain swaps, cross-chain payments, and cross-chain lending. This could, for instance, enable the purchase of an NFT with a Progmat Coin on a different blockchain. TOKI intends to launch its bridge later this year and issue its crypto token.
Originally announced in February last year, the Progmat Coin aims to provide a universal digital asset payment method for stablecoins, other cryptocurrencies, and a Japanese central bank digital currency (CBDC). The Progmat platform also supports security and utility tokens, with plans for some to potentially involve cross bridges in the future. Several security tokens have already been issued.
However, the platform is not without some risk. While making digital assets more accessible, this new initiative may generate concerns about the potential for fraud, hacks, and thefts. The growth of decentralized finance (DeFi) has made some people uneasy, fearing that their investments may not be as safe as they seem. Moreover, the more public blockchains that are included in the platform, the higher the chance of encountering security breaches.
Despite these concerns, Progmat has still garnered some impressive backing. Initially founded by MUFG, it is now evolving into a joint venture, attracting the support of Japan’s main stock exchange operator JPX, Mizuho, SMBC, SBI, and others.
In conclusion, the introduction of Progmat Coin has generated both excitement about its potential to revolutionize stablecoin issuance and concerns about its inherent risks. As Japan embraces new legislation allowing trust banks to issue stablecoins, it remains to be seen whether this development will lead to widespread adoption or expose more people to the inherent dangers of the cryptocurrency world. Whatever the outcome, it is clear that Japan is positioning itself at the forefront of digital asset innovation, presenting both opportunities and challenges for investors as they navigate this rapidly evolving landscape.
Source: Coingape
