Today Nikkei Asia reported that MUFG is planning to use a stablecoin digital currency to enable instant settlement of security tokens. MUFG Trust has developed a blockchain-based security token platform Progmat, which has attracted many of Japan’s biggest securities firms.
Update: a more detailed article about the Progmat Coin has been published. It’s designed to be issues by multiple organizations.
The security token platform partners include Daiwa Securities, Tokai Tokyo Securities, Mitsubishi UFJ Morgan Stanley Securities and its joint venture partner Morgan Stanley MUFG Securities, au Cubcom Securities, SBI Securities, SMBC Nikko Securities and two unspecified members.
One recent application announced on Progmat was for real estate asset-backed securities underwritten by Nomura and SBI securities.
When Japan’s 62 member Security Token Research Consortium outlined a roadmap last October, one of the key requirements was to link to a digital currency system. By enabling P2P settlement between investors, it’s possible to reduce settlement risk, especially between Japan and China. Also, by enabling automated lending, there’s less need for intraday liquidity via the real-time gross settlement (RTGS) system. Plus, a digital currency could support 24/7 trading.
Nikkei reported that MUFG would issue the Yen-linked stablecoin token. However, there are multiple other Japanese stablecoin initiatives, including Japan’s Digital Currency Forum, where MUFG is a member. That solution is still at the research stage with Nomura leading the working group for security tokens, but includes multiple banks issuing yen tokens linked to bank balances.
Additionally, MUFG has another blockchain payments initiative that is already in production. In April 2021, the Global Open Network (GO-NET) was launched in conjunction with Akamai. The system uses blockchain but specifically targets small payments such as debit cards and vending machine payments.
Meanwhile, in the U.S. plans for bank-linked payment systems are starting to ramp up. JP Morgan was the early first mover with its JPM Coin. But the real allure is to enable interbank payments. Recently a network of regional banks announced the USDF Consortium, a multi-bank-backed stablecoin. And TassatPay unveiled the Digital Interbank Network, tokenized bank money as digital dollars.