September 28, 2023
By Sharan Kaur Phillora
In a significant collaboration, Binance, a global leader in crypto exchange, is teaming up with Mitsubishi UFJ Trust and Banking Corporation (MUTB), a subsidiary of one of Japan’s largest financial entities, to explore the possibility of launching a groundbreaking stablecoin in Asia.
Here’s what we know:
This joint initiative, also involving Progmat, aims to develop a stablecoin, not just in Japanese Yen (JPY) but also incorporating foreign currencies like the US dollar (USD), to accelerate Web3 adoption in Japan.
According to reports, the partnership will leverage the Progmat Coin platform, which is compliant with the recently revised Japanese regulations, to craft a stablecoin that will play a pivotal role in Binance’s expansive global ecosystem. MUTB has been instrumental in developing the Progmat Coin infrastructure, aligning with the amended Payment Services Act that came into effect in June 2023, allowing regulated crypto providers and banks to issue stablecoins.
Binance Japan, reinstated in August 2023 after addressing regulatory issues, currently manages 34 crypto assets, marking the largest offering in the Japanese market. The company plans to introduce a myriad of services progressively to the Japanese market, aiming to mirror the global version’s standards upon completing the required license registration under domestic regulations. The global arm of Binance serves over 150 million users worldwide, providing access to more than 350 stocks.
In a statement, Binance Japan’s CEO, Tsuyoshi Chino, expressed enthusiasm about the venture and acknowledged the regulatory challenges in Japan, which restrict stablecoin issuers to banks, fund transfer companies, and trust firms. However, Chino emphasized the potential of collaborating with MUTB to navigate these challenges, highlighting the myriad of possibilities Japanese Yen-based stablecoins could bring to the virtual currency sphere, including trade transactions and security tokens beyond.
With the potential for Japan’s stablecoin market to burgeon to approximately 5 trillion yen ($34 billion), about 27% of the estimated global market, according to Tatsuya Saito, MUFG’s vice president of product, the collaborative effort is poised to publish the stablecoin within the next year. The initiative fulfills regulatory requirements to obtain the license for handling stablecoins under the newly established Electronic Payment Instruments Transaction Business.
Additionally, reports indicate that Orix Bank, alongside MUTB, is considering the issuance of stablecoins, with several stablecoins linked to JPY and USD anticipated to be released post-2024.
As Japan positions itself as a fertile ground for stablecoin rollouts, this collaboration between Binance and MUTB marks a significant stride towards harnessing the potential of stablecoin, not only for virtual currency demands but also for broader financial applications, including trading and security tokens.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.