Japan’s Banks Prepare to Use MFG’s Progmat Coin to Issue Stablecoins

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  • MFG declared that its stablecoin issuer Progmatic Coin would be soon used by Japanese banks.
  • The banks would use the platform to issue stablecoins on crypto networks.
  • The Japanese financial company has collaborated with Datachain and TOKI to promote the interoperability of blockchains.

Mitsubishi UFG Financial Group (MFG), a Japanese financial services company announced on June 2 that Progmat Coin, the stablecoin issuance platform of MFG would facilitate the issuance of bank-backed stablecoins on the leading crypto networks including Ethereum, Polygon, Avalanche, and Cosmos. The report stated that the Japanese banks would soon use Progmat Coin to launch the yen-pegged stablecoins on the public blockchains.

MUFG introduced the Progmat Coin in February 2022, with the intention to enable a “universal digital asset payment method,” promoting cross-chain interoperability with a wide range of virtual assets, and the digital yen, Japan’s central bank digital currency.

In June 2022, the Japanese government issued a bill proposing a ban on stablecoin issuance by non-banking institutions, which came into complete effect on June 1, 2023. The bill intended to limit the issuance of stablecoins to licensed banks, registered agents, and trust companies in Japan.

In a groundbreaking development, the banking giant has also shown consistent interest in the promotion of blockchain interoperability, which is evident from the platform’s collaboration with the blockchain interoperability startup Datachain, and a novel cross-chain bridge solution built on Datachain technology, TOKI.

TOKI officially announced its collaboration with MUFG via a Twitter thread, stating that the team is “thrilled to announce that MUFG (Progmat), Datachain, and TOKI have teamed up to bring Japanese stablecoins to public blockchains”:

However, according to the financial newspaper Nikkei Asia report published on June 1, leading Japanese banks, including Shikoku Bank, Tokyo Kiraboshi, and Minna Bank declared their decision to restrict themselves from using Pragmat Coin to issue stablecoins. MUFG hasn’t yet revealed which bank would use the platform initially.

Japan has been exhibiting enthusiasm for expanding the crypto industry in the nation, adopting more strategies and regulations, focused on its clean establishment. Recently, three Japanese banks announced the issuance of stablecoins on an Ethereum-compatible blockchain in compliance with the law.