The largest bank in Japan, Mitsubishi UFJ Financial Group Inc (MUFG), is currently in discussions with global stablecoin issuers to mint tokens through its blockchain platform, Progmat. Japan’s stablecoin law came into effect at the beginning of June, allowing the country’s licensed banks and other registered financial entities to issue cryptocurrencies.
According to MUFG’s Vice President of Product, Tatsuya Saito, the new legislation makes it possible for issuers and users to feel safe when using stablecoins. Stablecoins are crucial to the crypto industry, providing reliable assets for investors to hold funds during trades involving more volatile tokens. To date, around $130 billion worth of stablecoins are in circulation worldwide.
However, popularity has led to heightened scrutiny from regulators. Japan has taken steps to promote the use of stablecoins backed by fiat cash in their corresponding currency. This ensures greater stability and transparency. MUFG plans to use its Progmat platform to issue security tokens for third parties, but it currently has no intentions to float its own stablecoin.
MUFG’s discussions about stablecoins involve various Japanese financial institutions, entertainment firms, and non-financial businesses. With inquiries also coming from overseas financial groups, Japan could potentially establish itself as a hub for stablecoin issuance. Leading stablecoins like Tether and USD Coin by Circle Internet Financial Ltd hold the major market share, with token issuers having to comply with Japan’s stablecoin legislation.
Saito suggested that the fact that stablecoins can be based on multiple currencies, like the US Dollar, and still operate within regulations provides opportunities for international token issuance. This serves as a significant opportunity for Japan’s economy and global financial influence.
Despite Japan’s efforts to relax some cryptocurrency regulations, such as token listings and taxation, it is often perceived as having strict regulations in the industry. However, recent moves to loosen margin trading rules for crypto suggest Japan is aiming for a more open, yet regulated, cryptocurrency environment.
In conclusion, MUFG’s discussions with stablecoin issuers highlight the growing role and acceptance of stablecoins as crucial elements in the cryptocurrency market. Japan’s stablecoin legislation presents new opportunities and challenges, but ultimately seeks to ensure the stablecoin market remains secure, transparent, and reliable for both issuers and users alike. With eyes on Japan as a potential hub for stablecoin issuance, the country is poised to play a significant role in shaping the future of the cryptocurrency industry.
Source: Coingape
