Mitsubishi UFJ Financial Group (MUFG) – the largest finance institution in Japan – is reportedly considering issuing global stablecoins via its blockchain platform.
The bank has previously revealed plans to introduce such tokens tied to the value of the Japanese yen.
MUFG’s New Crypto Idea
As reported by Bloomberg, the entity is in talks with industry leaders and other companies on minting stablecoins pegged to foreign currencies, such as the US dollar. To do so, it intends to use its blockchain platform Progmat, Vice President of Product Tatsuya Saito said.
The executive added that potential partners in the move are several local financial institutions, entertainment firms, and other non-financial businesses. Inquiries also come from foreign organizations, meaning Japan could become a global hub for stablecoins, Saito envisioned.
Such financial products have been the subject of enhanced scrutiny in the Asian country, especially after the collapse of the algorithmic stablecoin UST last year, which triggered multi-billion investor losses.
The Japanese authorities recognized stablecoins as digital money but said they could only be issued by licensed banks, money transfer agents, or trust companies. Saito praised the recently-enforced legislation, maintaining it could bring additional consumer protection:
“Issuers and users can feel safe using stablecoins.”
Japan’s government, under the lead of Prime Minister Fumio Kishida, has allowed the local crypto industry to thrive by introducing favorable rules. It approved a policy last summer that should advance the Web3 sector in the country.
In addition, leading lobbying groups have raised their voices on crypto taxation, insisting that the ruling body reduces the rates. Should their wish receive approval, domestic companies will be excluded from paying taxes on paper gains on cryptocurrency holdings if they own them for purposes other than short-term trades.
The Previous Efforts
The trust banking arm of MUFG displayed its first interest in the matter in February 2022 when exploring the possibilities of launching a stablecoin pegged to Japan’s official currency.
Experts have claimed that such a token could allow the entity to boost its payment network by instantly setting securities transactions. Those types of monetary procedures are currently quite pricey and can take a couple of days to be finalized.