Earlier this month, Japan passed its stablecoin bill. This particular asset class had been given the status of “digital money.” According to the new law, stablecoins ought to be linked to the yen or another legal tender. Parallelly, it should also guarantee holders the right to redeem them at face value.
This technically means stablecoins can only be issued by registered money transfer agents, licensed banks, and trust companies. However, it should be noted that the law doesn’t touch upon existing asset-backed stablecoins from overseas issuers like Tether.
Now, Japan’s largest bank, Mitsubishi UFJ Financial Group [MUFG], is reportedly in talks with companies associated with prominent global stablecoins. Alongside, it is also discussing with firms about issuing such tokens via its own blockchain platform, Progmat.
Talks with entertainment firms, financial and non-financial businesses
The talks have been revolving around the minting of stablecoins linked to foreign currencies, including the U.S. dollar, for global use. MUFG intends to use Progmat to issue security tokens for third parties. Nevertheless, it doesn’t have a plan for its own stablecoin. Without specifying which parties MUFG is talking to, the bank’s Vice President of Products, Tatsuya Saito, told Bloomberg,
“Issuers and users can feel safe using stablecoins” now the legislation is in effect.
Nevertheless, he added that discussions have been going on with entertainment firms, other non-financial businesses, and a group of Japanese financial firms. Saito further revealed that the bank has been getting inquiries from overseas financial groups. According to him, Japan could end up becoming a global hub for stablecoin issuance.
Well, others from the Japanese banking space have also been trying and testing stablecoins. According to recent reports, three Japanese banks came together to experiment with stablecoin payments. GU Technologies, a Web3 infrastructure company, developed a system for the same on the ‘Japan Open Chain.’ The chain is fully compatible with Ethereum and falls in line with Japanese law. Tokyo Kiraboshi Financial Group, Minna no Bank, and Shikoku Bank were the banks involved.