Binance Japan has partnered with Mitsubishi UFJ Trust and Banking Corporation (MUTB) to explore the development of stablecoins. This strategic alliance aims to conduct a comprehensive study on the issuance of stablecoins, particularly those pegged to sovereign currencies like the Japanese yen. The primary objective, however, is to drive the adoption of Web3 technologies in Japan.
In a joint press release, both Binance Japan and MUTB express their commitment to introducing new stablecoins that can play a pivotal role in accelerating the widespread acceptance of Web3 within the Japanese market. It’s important to clarify that this study is separate from a firm commitment to release stablecoins. Binance Japan is still required to secure “applicable regulatory approvals” before moving forward. Nonetheless, Japan’s burgeoning Web3 ambitions and the emergence of new stablecoin regulations create a conducive environment for the incubation of this innovative project.
The involvement of Mitsubishi UFJ Trust and Banking Corporation, a respected player in the traditional financial sector, adds a significant degree of legitimacy to this collaborative effort. The corporation leads a consortium of banks and trust banks that aims to issue stablecoins on both private and public blockchains through a compliant platform named Progmat Coin. Binance Japan also intends to leverage this platform.
New Stablecoin Regulations in Japan
Progmat Coin has obtained permissions under the new stablecoin regulations that came into effect in June. These regulations empower Japanese exchanges to seek specialized licenses for trading stablecoins, even if they are issued overseas. This development opens up opportunities for stablecoin issuers like Circle, which handles USDC and USDT, to enter the Japanese market.
In contrast to other jurisdictions, such as the European Union and the United Kingdom, which have adopted more stringent approaches to regulating stablecoins, Japan has embraced the Web3 and stablecoin space. In April, the country unveiled a roadmap dedicated to driving Web3 growth and ensuring consumer protection through increased oversight.
Mitigating Stablecoin Risks
MUTB asserts that its Progmat platform has the potential to mitigate some of the inherent risks associated with stablecoins that regulators are concerned about. Tatsuya Saito, Founder and CEO of Progmat Inc. and Vice President of Product at MUTB, emphasized the platform’s neutrality and flexibility, describing it as an infrastructure that facilitates the issuance of various stablecoin brands with minimal risk of de-pegging.
As part of their collaborative efforts, Binance Japan and MUTB plan to explore the issuance of stablecoins that could be deployed on multiple blockchains, including Ethereum and Binance’s BNB Chain. This partnership holds promise for the evolving landscape of digital finance and Web3 adoption in Japan.