Tatsuya Saito, vice president of products at Mitsubishi UFJ Financial Group, believes that Japan could become a global hub for stablecoin issuance.
Japan’s largest financial institution, Mitsubishi UFJ Financial Group (MUFG), is reportedly considering issuing a global stablecoin through its blockchain platform.
The bank had previously revealed plans to launch a token pegged to the value of the yen.
MUFG’s New Encryption Concept
According to Bloomberg, the entity is in talks with industry leaders and other companies about minting stablecoins pegged to foreign currencies such as the U.S. dollar. For this purpose, it intends to use its blockchain platform Progmat, said Tatsuya Saito, vice president of product.
The executive added that potential partners in the move include several local financial institutions, entertainment companies and other non-financial businesses. Saito envisions that inquiries are also coming from foreign organizations, meaning Japan could become a global hub for stablecoins.
Such financial products have been under scrutiny in the Asian country, especially after the collapse of algorithmic stablecoin UST last year, which triggered billions of investor losses.
Japanese authorities acknowledged that stablecoins are digital currencies but said they can only be issued by licensed banks, remittance agents or trust companies. Saito praised the recently implemented legislation, arguing that it could bring additional consumer protection:
“Issuers and users can use stablecoins with confidence.”
The Japanese government, under Prime Minister Fumio Kishida, has allowed the local cryptocurrency industry to flourish by introducing favorable rules, and last summer it approved a policy that will boost the country’s Web3 industry.
Additionally, major lobbying groups have put forward their own views on cryptocurrency taxation, insisting that the ruling body reduce the tax rate. If their wish is granted, domestic companies will not have to pay taxes on cryptocurrency book gains if they hold cryptocurrencies for purposes other than short-term trading.
Previous efforts
In February 2022, Mitsubishi UFJ Financial Group’s trust banking unit first expressed interest in the matter when it explored the possibility of launching a stablecoin pegged to Japan’s official currency.
Experts claim that this token will allow the entity to enhance its payment network by instantly settling securities transactions. Currently, such currency procedures are quite costly and can take several days to complete.