MUFG was the founder of Progmat, a tokenization platform that supports digital securities as well as Progmat Coin for stablecoins. In mid 2024 Japanese wallet provider Ginco plans to launch stablecoins XJPY and XUSD to enable settlement between cryptocurrency exchanges. Meanwhile, Binance recently said it planned to issue stablecoins on the Progmat Coin platform, subject to regulatory approval.
Currently most Japanese cryptocurrency exchanges and institutions pay each other via banks, which have limited operating hours. In contrast, in other jurisdictions crypto liquidity providers and exchanges use stablecoins for settlement. Apart from expanding hours, stablecoin transactions will also be cheaper.
The stablecoin issuance is part of a joint study. Ginco is the initiator, subject to receiving a license. Mitsubishi UFJ Trust Bank will act as trustee for the stablecoin reserve assets and hence issuer on the Progmat network. This is similar to the relationship between PayPal and Paxos Trust in the United States. And the crypto institutions involved in the Japanese study are market maker DRW Cumberland and local firms bitbank and mercoin.
We previously outlined the different stablecoin options in Japan. Banks can issue stablecoins, but these require KYC for transfers. In contrast, with Trust based stablecoins, psuedonymous transfers are permitted.
MUFG founded Progmat, but shareholders now include SMBC, Mizuho, Sumitomo Mitsui Trust, SBI, JPX (Tokyo Stock Exchange operator), NTT Data and web3 firm Datachain.