Japan’s biggest bank by assets, Mitsubishi UFJ Trust is all set to issue stablecoin tied to the value of the Japanese yen. As per a report published by Nikkei, it aims to bring about a streamlined and accelerated settlement process of securities transactions through the use of blockchain technology for trading and digital assets for payment.
The report also revealed that banks are expected to follow suit in allowing stablecoins in Japan under a revised law that is slated to take effect in the spring of next year.
Further, the bank hopes that the latest initiative will encourage the usage of blockchain in securities trading. For this, the trust bank has been heavily promoting blockchain-based securities in collaboration with SBI and Daiwa Securities.
Stablecoins making huge inroads in Japan’s fintech landscape
Last year Japan planned to impose new restrictions that would only permit banks and electronic funds transfer services to issue stablecoins.
The country’s Financial Services Agency [FSA] first proposed the law took drawing inspiration from a similar US legislation to regulate stablecoins. In November 2021, the US Department of Treasury supported Congress to pass legislation that would prohibit any other entities except banks from issuing the currency.
Just a few days ago, in a report first released by Nikkei Asia today, the news agency informed on the announcement of Japanese trading company Mitsui & Co.’s plans to float a gold pegged cryptocurrency in the country. The currency would be linked to the prices of gold and sold to retail investors via cryptocurrency exchanges.
The asset dubbed ZipangCoin [ZPG] will be available for trading by this month. While Mitsui is preparing for the launch of its gold pegged stablecoin, the country’s effort on its digital currency has completed the first phase.
Update on Japan’s digital Yen
Japan is gearing for the launch of its second phase of pilot testing with Central Bank Digital Currency [CBDC] with the governor hoping that the Bank of Japan might make an official decision on the issuance of CBDCs by 2026.
However, not all seem happy with the decision as recently, a former BOJ official, Hiromi Yamaoka stated that “CBDCs are not a good idea” since he feels that applying negative rates to CBDC might be harmful to the economy.