Japan's three largest banks Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC) and Mizuho Bank (Mizuho) will try a cross-border stablecoin transfer pilot program called "Project Pax" to provide enterprises with faster international transfers. Settlement.
"Project Pax" bridged with SWIFT
According to previous reports, Mitsubishi UFJ Financial Group, Inc. (MUFG), Japan's largest financial institution, spent several years developing the Progmat blockchain infrastructure. In April last year, it announced that it had conducted cross-chain trials and completed the use of stable It will settle digital securities transactions in currency and plans to achieve commercialization in 2024.
Progmat is a blockchain startup backed by Japan’s three major banks (MUFG, SMBC and Mizuho), as well as SBI Holdings and Japan Exchange Group.
This time, "Project Pax" has joined Datachain, which is responsible for cross-chain bridging, to jointly create a cross-border stablecoin transfer platform.
According to its press release, the project plans to use SWIFT’s existing bank’s API framework to guide Progmat’s choice of blockchain network. This helps address anti-money laundering (AML) and other regulatory compliance and operational challenges. The project is expected to be commercialized in 2025.
With this platform, enterprise users of stablecoins will be able to make faster, more cost-effective international transfers without undue concern about the existence of stablecoins or blockchain technology. This will provide a seamless experience similar to traditional international transfers, and the quantified effects will be verified and visualized through the pilot.
For financial institutions, leveraging existing systems eliminates the need to build new infrastructure from scratch, allowing them to offer new transfer options to corporate customers while minimizing investments.
Japan Stablecoin Act
Japan passed the Stablecoin Act as early as 2022, establishing the legal status of stablecoins. By definition, stablecoins are digital currencies and must be linked to the Japanese yen or other legal currencies, and ensure that the holder has the right to redeem them at face value. It is expected that regulatory-compliant stablecoins will be issued and used in the real economy by the end of 2024.
In addition, the bill also stipulates that stablecoins can only be issued by licensed banks, registered remittance agents and trust companies.
MUFG has publicly stated before that it will issue its own stable currency Progmat Coin once regulations are fully planned. This stablecoin uses Japanese yen held in a trust account as a reserve and is guaranteed to be redeemable at market value.
According to the press release, Progmat-led “Progmat Coin”, a platform that supports various blockchains, including permissionless (public) blockchains, serves as the infrastructure for issuing stablecoins that comply with stablecoin regulations. The platform not only complies with laws and regulations, but also solves accounting and tax issues, and is able to issue stablecoins that companies can use with peace of mind. In addition, various stablecoins issued using the "Progmat Coin" platform can be denominated in major legal currencies such as Japanese yen, US dollars, and euros, and can be flexibly used at home and abroad.
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This article is reprinted with permission from: Lian News
