Mitsubishi UFJ Financial Group (MUFG) – Japan’s largest financial institution – is reportedly considering issuing global stablecoins through its blockchain platform.
The bank previously revealed plans to introduce such tokens tied to the value of the Japanese yen.
MUFG’s New Crypto Idea
as reported by Bloomberg, the entity is in talks with industry leaders and other companies to create stablecoins pegged to foreign currencies, such as the US dollar. To do so, it intends to use its blockchain platform Progmat, Vice President of Product Tatsuya Saito said.
The executive added that potential partners in the move are many local financial institutions, entertainment companies, and other non-financial businesses. Inquiries are also coming from foreign organizations, meaning Japan will become a global hub for stablecoins, Saito envisions.
Such financial products have been the subject of increased scrutiny in the Asian country, especially after the collapse of the algorithmic stablecoin UST last year, which caused billions in investor losses.
The Japanese authorities RECOGNIZED stablecoins as digital money but said they can only be issued by licensed banks, money transfer agents, or trust companies. Saito praised the recently enacted law, maintaining that it will provide more protection to consumers:
“Issuers and users can feel safe using stablecoins.”
The Japanese government, under the leadership of Prime Minister Fumio Kishida, has allowed the local crypto industry to flourish by introducing favorable regulations. It approved a policy last summer that should improve the country’s Web3 sector.
In addition, leading lobby groups have raised their voices on crypto taxation, insisting that the governing body reduce rates. If their wish receives approval, domestic companies will be exempted from paying tax on paper gains on cryptocurrency assets if they own them for purposes other than short-term trades. .
Past Efforts
The trust banking arm of MUFG showed its first interest in the matter in February 2022 when it explored the possibilities of launching a stablecoin pegged to Japan’s official currency.
Experts claim that such a token could allow the entity to expand its payment network by quickly settling securities transactions. These types of money procedures are currently quite expensive and may take several days to complete.
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