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Binance is partnering with Japan’s biggest bank to launch stablecoins in Japan by the end of next year.
Binance said its conducting a joint study of stablecoins pegged to fiat currencies including the yen and other foreign currencies with Mitsubishi UFJ Trust and Banking Corporation (MUTB), which is a unit of the nation’s biggest bank, MUFG.
“Both companies intend on commencing stablecoin operations by the end of 2024 upon completion and approval of applicable regulatory approvals by Binance Japan,” Binance said. ”Both companies aim to issue new stablecoins to help accelerate the mass adoption of Web3 in Japan.”
Japan allowed the issuing of stablecoins by licensed crypto platforms in June. This prompted Orix Corp. and other firms to consider introducing stablecoin tokens that are said to offer financial benefits like quicker money transfers and settlements.
Binance chose to partner with MUTB due to its principal role in the development of the “Progmat Coin” platform. The platform is an infrastructure for issuing stablecoins that is compliant with Japan’s Payments Services Act enforced in June 2023.
🇯🇵ステーブルコイン発行へ、バイナンスジャパンと三菱UFJ信託が検討。 #BinanceJapan #Binance
⬇️詳細はこちら https://t.co/xGfTPMk8i7
— Binance Japan 🇯🇵｜JPY板取引無料キャンペーン中 (@_BinanceJapan) September 26, 2023
MUTB has been discussing with multiple parties about using its blockchain platform, Progmat, to mint stablecoins tied to foreign currencies. As such, the market should anticipate the issuance and circulation of various stablecoins as soon as the intermediaries handling them have completed their license registration with the relevant authorities.
MUTB has also announced various technology partnerships with the aim of smooth mutual transfer and exchange of stablecoin issuance on various blockchains, including public blockchains such as Ethereum.
These partnerships will streamline the process of issuing stablecoins for Binance, creating a more seamless and compliant setup for the operations.
Through their partnership, the duo intends on commencing stablecoin operations towards the end of next year once they have gathered all the necessary approvals from Japanese regulators and are assured that their operations are in compliance with Japanese laws.
This study as well as the eventual issuance of stablecoins is part of Binance’s strategy to re-establishing its market in Japan. The exchange stated that it intends to enrich its services to the Japanese market and gradually close the gap between Japan and global offerings in a compliant way.
Binance believes that stablecoins could play a big role in satisfying the financial services needs of the Japanese market, hence the exchange’s pursuit. “Stablecoins have important use cases across the broader financial ecosystem – from a lower-cost and instantaneous cross-border trade settlement for business clients to the facilitation of trading other cryptocurrencies seamlessly for retail investors,” said Takeshi Chino, General Manager of Binance Japan, in the statement.
According to Tatsuya Saito, vice president of products at MUFG, the market for stablecoins in Japan might reach 5 trillion yen ($34 billion), or about a fourth of the projected current global market. This makes it a lucrative venture for exchanges in the region.
Binance’s Japan Comeback
Binance has been working on it’s compliant re-entry into the Japanese market. The exchange had taken a step back from operating in the country after the financial regulators issued a second warning in 2021 that Binance was offering services without a license.
This warning came after an initial one in March 2018 where Japan’s Financial Services Agency (FSA) said that the exchange would face criminal charges if it continued to do business without a license.
As a first step into Japan, Binance acquired 100% of Sakura Exchange BitCoin, which opened the way for it to be regulated by the FSA. The exchange has since changed its name from Sakura Exchange BitCoin to Binance Japan, making it an arm of the world’s largest cryptocurrency.
#Binance Acquires JFSA Registered Sakura Exchange BitCoin, Committed to Enter Japan Under Regulatory Compliancehttps://t.co/xfdnaY2hiO
— CZ 🔶 BNB (@cz_binance) November 30, 2022
The Japanese division fully launched operations in August with 34 tokens and is looking to increase its offerings to 100 tokens in the short term.
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