MUFG to Issue Foreign-Currency Stablecoins via Progmat Blockchain Platform

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MUFJ Exploring Stablecoin Issuance Via Progmat

• Mitsubishi UFJ Financial Group (MUFG) is in negotiations to issue stablecoins through its blockchain platform, Progmat.
• Japan’s new legislation requires only licensed banks, money transferring services, and trust companies can legally issue these tokens.
• MUFG’s VP of Product Tatsuya Saito says the bank is looking to generate foreign-currency stablecoins for global usage.

Japanese Legislation On Stablecoins

Japan has recently implemented a legal framework that mandates only licensed banks, registered money transferring services, and trust companies can issue stablecoins. This legislation was created with the purpose of instilling confidence in these digital assets by stabilizing their value and backing them up with cash or bond reserves worth $1 USD. CoinGecko data suggests that the circulating stablecoins’ worth is likely around $130 billion.

MUFG Negotiations With Stablecoin Organizations

Mitsubishi UFJ Financial Group Inc., (MUFG) is currently in discussions with several businesses linked to major international stablecoins about deploying these digital assets via its blockchain platform Progmat. Tatsuya Saito, MUFG’s VP of Product stated that the bank is pondering over the use of Progmat to generate foreign-currency stablecoins for global usage. He did not disclose any information regarding which organizations they are negotiating with at this time.

Issuance Of Third-Party Security Tokens

Saito also mentioned that MUFG’s main plans revolve around Progmat’s use to issue third-party security tokens rather than focusing on immediate plans related to releasing a MUFG-branded coin anytime soon.

Risks Involved With Stablecoins

Although there have been some cases when stablecoins deviated from their pegs and caused volatility in crypto markets such as terraUSD in May 2022 which resulted in a roughly $40 billion loss; regulatory bodies have since then increased their surveillance of stablecoins due to such incidents.