Cryptocurrency exchange Binance and Mitsubishi UFJ Trust and Banking Corporation (MUTB) are taking bold steps towards issuing Yen and other foreign currency-denominated stablecoins in Japan. The partnership, announced on September 25, aims to accelerate the adoption of Web3 in Japan.
This move sees these companies aligning with Japan’s Payments Services Act, enacted in June, enabling banks and regulated crypto providers to issue stablecoins. The potential impact is sprawling, with MUFG’s vice president of product, Tatsuya Saito, predicting a potential growth of Japan’s stablecoin market to $34 billion. This estimation accounts for 27% of the estimated current global market valued at $123.7 billion.
However, the venture is not without its anxieties. Binance‘s move towards an increased stablecoin concentration may raise eyebrows in light of the exchange’s recent regulatory issues in the West. It is perhaps realistic then, to consider that similar pressure may arise in this new expedition into Japanese stablecoins.
Binance and MUTB notably plan to use a platform dubbed “Progmat Coin”, a system asserting regulatory compliance in the issuance and management of stablecoins. As the infrastructure is developed, the possibility of expanding to include BNB Chain is under exploration.
General manager of Binance Japan, Takeshi Chino, has been vocal about the significance of stablecoins in the broader financial ecosystem. They allow both a low cost, instantaneous cross-border trade settlement for businesses, and ease in crypto transactions for retail investors, thereby fostering inroads into wider Web3 adoption.
Despite the obvious value, it would be unwise to ignore potential roadblocks. Raising public funds through the issuance of crypto assets and stablecoins is a somewhat uncharted path with unexpected hurdles potentially lurking. In addition, competition is not insignificant, with Japan’s Orix Bank also potentially planning to issue stablecoins, pushing for testing to begin next month ahead of a potential 2024 launch.
While Japan appears well situated for the roll-out of stablecoins, adopting them as a payment method has its own set of challenges. Still, the interest and exploratory dive into stablecoins by notable entities such as Binance, MITB, and other Japanese firms signal an interesting and important shift in the cryptocurrency market in Japan. The subsequent advances in this sector will be ripe for consumption.
Source: Cointelegraph
