Japan’s big 3 banks, MUFG, SMBC and Mizuho are involved with with a cross border payment system, Project Pax, that aims to use stablecoins instead of correspondent banks. However, in order to ensure that corporate customers can trigger trade payments in the conventional manner via their banks, Swift payment messages will be integrated with the stablecoin system, which is based on Progmat. Hence, the clients don’t touch the stablecoins.
Given the efficiencies of stablecoin payments, the aim is to support 24/7 payments to address the G20’s goals for faster, cheaper, more transparent cross border payments. The total market capitalization of stablecoins has reached $170 billion with cryptocurrency as the primary use case, although they are also used for P2P payments.
Meanwhile, Progmat is a DLT-based tokenization network founded by MUFG, in which Mizuho and SMBC are joint venture partners alongside other institutions. Additionally, there’s a Progmat Coin solution which is primarily used for trust-based stablecoins, which have ring-fenced assets.
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