Japan passed its stablecoin bill earlier this month. This specific asset class was designated as “digital money.” Stablecoins must be connected to the yen or another kind of legal money, according to the new rule. In addition, it should ensure holders have the option to redeem them for face value.
Accordingly, only licenced banks, trust firms, and registered money transfer providers are legally permitted to issue stablecoins. The rule does not apply to existing asset-backed stablecoins from foreign issuers like Tether, it should be stressed.
Now, according to reports, Mitsubishi UFJ Financial Group [MUFG], the largest bank in Japan, is in discussions with firms connected to well-known stablecoins around the world. Additionally, it is in talks with businesses about launching these currencies on its own blockchain platform, Progmat.
Stablecoin Talks Are Doing The Rounds
The topic of the discussions has been the creation of stable coins for international use that are pegged to other currencies, notably the dollar. Progmat will be used by MUFG to create security tokens for external parties. It does not, however, have any plans for its own stable coin. Tatsuya Saito, vice president of products at the bank, told Bloomberg that “MUFG is in talks,” without identifying with whom.
“Issuers and users can feel safe using stablecoins” now the legislation is in effect.
However, he went on to say that talks have been had with entertainment companies, other non-financial companies, and a collection of Japanese financial firms. Saito went on to say that the bank has been receiving queries from foreign financial organizations. He asserted that Japan might eventually develop into a major worldwide stablecoin issuance center.
Others in the Japanese banking industry have also experimented with and tested stable coins. Recent reports state that three Japanese banks joined forces to test out stable coin payments. On the “Japan Open Chain,” GU Technologies, a provider of Web3 infrastructure, created a system for the same. The chain complies with Japanese law and is completely compatible with Ethereum. The banks involved were Tokyo Kiraboshi Financial Group, Minna no Bank, and Shikoku Bank.