Binance, one of the leading cryptocurrency exchanges, has joined forces with Japan’s largest bank, the Mitsubishi UFJ Trust and Banking Corporation (MUTB), to embark on a collaborative venture aimed at exploring the issuance of stablecoins within the Japanese market.
The partnership, announced by Binance Japan on September 25, is geared towards facilitating the accelerated adoption of Web3 technologies in Japan.
Specifically, the initiative intends to introduce Japanese yen and other fiat-backed stablecoins into the ecosystem.
To achieve this, the two entities intend to leverage the stablecoin issuance platform known as Progmat Coin, which is operated by MUFG.
Mitsubishi UFJ Trust and Banking Corporation will play a pioneering role in developing the Progmat Coin platform, positioning it as the infrastructure for issuing stablecoins in accordance with Japan’s recently revised and enacted Payments Services Act.
This legislation, which came into effect in June, grants Japanese banks and regulated cryptocurrency service providers the authority to issue stablecoins.
Progmat Coin is designed to facilitate stablecoin issuance on various networks, including Ethereum, Polygon, Avalanche, Cosmos, and BNB Chain.
Takeshi Chino, the General Manager of Binance Japan, emphasized the critical role stablecoins play within the broader financial ecosystem.
He highlighted their ability to offer cost-effective and near-instantaneous cross-border trade settlement for businesses, as well as seamless crypto transactions for retail investors.
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Stablecoins are recognized as a fundamental component for the successful adoption of Web3 technologies.
According to Tatsuya Saito, Vice President of Product at MUFG, the stablecoin market in Japan has the potential to reach up to 5 trillion yen (approximately $34 billion).
This figure represents around 27% of the estimated current global stablecoin market, which stands at $123.7 billion according to CoinGecko.
Despite regulatory challenges faced by Binance in Western markets, the exchange expanded its services to the Japanese market in August 2023, offering a range of 34 tokens.
Simultaneously, reports suggest that Orix Bank in Japan is also contemplating the issuance of stablecoins. Orix plans to commence testing yen, United States dollar, and other stablecoins in October, with an anticipated launch in 2024.
These stablecoins will be backed by fiat deposits and utilize the Japan Open Chain blockchain, developed by Tokyo-based G.U. Technologies and its partners.
Japan appears poised to become a significant player in the stablecoin arena, with various entities exploring stablecoin initiatives, and the government reportedly planning to allow startups to raise public funds through the issuance of crypto assets and stablecoins.
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