Binance and Other Companies Exploring New Stablecoins in Japan

In a significant development, cryptocurrency exchange Binance is collaborating with Japan’s largest bank, the Mitsubishi UFJ Trust and Banking Corporation (MUTB), to embark on an exploration into the issuance of stablecoins within the Japanese market.

Binance Japan, on September 25th, unveiled a joint initiative aimed at issuing yen and other fiat-based stablecoins to expedite the adoption of Web3 technology in Japan. The partners intend to leverage a platform known as “Progmat Coin,” which would serve as a Japanese regulatory-compliant system for the issuance and management of stablecoins.

Crucially, the Japanese bank will play a pioneering role in developing the “Progmat Coin” platform, establishing it as a foundational infrastructure for issuing stablecoins in accordance with Japan’s recently revised and enacted Payments Services Act. This legislative framework, which came into effect in June, grants Japanese banks and regulated cryptocurrency providers the authority to issue stablecoins.

The platform currently facilitates stablecoin issuance on the Ethereum blockchain but may undergo expansion to include BNB Chain, thanks to the partnership with Binance, as disclosed in a statement by the exchange.

Takeshi Chino, the General Manager of Binance Japan, underscored the significance of stablecoins within the broader financial ecosystem. He emphasized their role in delivering cost-effective and instantaneous cross-border trade settlement solutions for businesses, while also streamlining cryptocurrency transactions for retail investors.

Stablecoins fulfill a critical role in the financial services sector and are pivotal to the successful adoption of Web3 technology, as noted by Tatsuya Saito, Vice President of Product at MUFG. Saito predicts that Japan’s stablecoin market has the potential to expand to approximately $34 billion (5 trillion yen), equivalent to approximately 27% of the estimated current global market size of $123.7 billion, according to CoinGecko data.

Binance, despite grappling with significant regulatory pressures in Western markets, commenced its services for the Japanese market in August 2023, offering a total of 34 tokens.

In parallel developments, Japan’s Orix Bank is reportedly contemplating plans to introduce stablecoins within the country. Orix intends to commence testing yen, dollar, and other stablecoins in October, with a target launch date in 2024. These stablecoins will be backed by fiat deposits and will leverage the Japan Open Chain blockchain developed by Tokyo-based G.U. Technologies and its partners.

Japan appears to be well-positioned to establish stablecoins as a fundamental component of its payment infrastructure. In August, it was reported that Japanese blockchain startup Soramitsu was exploring the creation of a new stablecoin exchange to facilitate cross-border payments across Asian countries.

Moreover, earlier this month, the Japanese government expressed its intent to permit startups to raise public funds through the issuance of crypto assets and stablecoins, signaling a progressive approach to harnessing the potential of digital assets for economic growth and innovation.

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