MUFG Joins Forces With Progmat Coin To Facilitate Japanese Bank-Backed Stablecoins

Updated: 04 June 2023

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Mitsubishi UFG Financial Group (MUFG), a Japanese financial services company, has revealed that Progmat Coin would facilitate the issuance of bank-backed stablecoins. Further, the platform will soon enable Japanese banks to launch stablecoins pegged to the Yen on various public blockchains, including Ethereum, Cosmos, Polygon, and Avalanche.

Progmat Coin is designed to support stablecoin issuance from trust banks, not only MUFG. However, this development follows new regulations implemented this month, which prompted Japanese banks to express their interest in exploring stablecoins.

MUFG introduced the Progmat Coin in February 2022, intending to enable a “universal digital asset payment method.” The platform aims to facilitate using stablecoins, various cryptocurrencies, and potentially even a major digital bank currency (CBDC) based in Japan. The goal is to provide interoperability and a user-friendly experience for digital asset payments.

In mid-2022, the Japanese government passed a bill restricting non-banking institutions from issuing stablecoins. The bill intended to limit the issuance of stablecoins to licensed banks, registered agents, and trust companies in the country. Nonetheless, the bill officially became effective on June 1, 2023.

TOKI Meets MUFG

However, apart from the recent developments, the banking giant has also shown consistent interest in promoting blockchain interoperability. This 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.

MUFG(Progmat) and @tokifinance have teamed up to build a cross-chain infrastructure using Japanese stablecoins!

We’re incredibly proud to be a core development partner of TOKI and contribute to build the cross-chain bridge.https://t.co/Y8i8ML5MlH

— Datachain (@datachain_en) June 2, 2023

TOKI officially revealed its collaboration with MUFG via a Twitter thread. It noted:

The team is thrilled to announce that MUFG (Progmat), Datachain, and TOKI have teamed up to bring Japanese stablecoins to public blockchains.”

However, MUFG has not disclosed the banks that will be the first to utilize Progmat Coin.

In a financial newspaper Nikkei Asia report, on June 1, Shikoku Bank, Tokyo Kiraboshi, and Minna Bank expressed their intentions to issue stablecoins. However, these banks will use a different stablecoin platform developed by a Tokyo-based startup, G.U. Technologies.

It is worth noting that Japan has been exhibiting enthusiasm for expanding the crypto industry. This is through 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.

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