Mitsubishi UFJ Financial Group (MUFG), a major bank in Japan, has introduced stablecoin issuance platform, Progmat Coin, which several Japanese banks will soon make use of to pioneer Japanese yen-pegged stablecoins on multiple public blockchains. Progmat Coin is built to work with stablecoin issuance from any trust bank, not only MUFG.
However, this development follows new regulations implemented this month, which prompted Japanese banks to express their interest in exploring stablecoins. Also, the bank collaborated with Toki and Datachain, partnering on a cross-chain bridge solution to enable cross-chain swaps, payments, and lending between supported blockchains.
In the second quarter of 2022, the Japanese government passed a bill that restricted non-banking institutions from issuing stablecoins. The bill officially became fully functional in June, 2023. TOKI plans to use Progmat Coins to operate liquidity pools across different blockchains
Although the solution appears to be primarily centered at the Japanese market, it remains unsure whether users will be required to undergo Know Your Customer (KYC) compliance measures to hold the stablecoins. Further clarification on this matter is being sought.
As MUFG launches the issuance of bank-backed stablecoins through Progmat Coin, the development signifies a significant step towards the merge of traditional banking and blockchain technology, with potential implications for global financial systems