- Premier Japanese bank MUFG will launch bank-backed stablecoins on several blockchains.
- Preferred networks are Ethereum, Avalanche, Cosmos, and Polygon.
- The bank has collaborated with DataChain, which specializes in blockchain interoperability.
Japan’s largest bank, Mitsubishi UFJ Financial Group (MUFG), has unveiled its plans to utilize its Progmat Coin solution for the issuance of native bank-backed stablecoins on several public blockchains.
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The bank aims to leverage the Ethereum, Avalanche, Cosmos, and Polygon networks for this initiative, although specific launch dates have not yet been confirmed.
Progmat Coin is designed to facilitate stablecoin issuance not only from MUFG but also from other trust banks. In line with this development, recent legislation has been enacted, granting Japanese trust banks the authority to issue stablecoins.
MUFG has been actively engaged in partnerships related to blockchain interoperability. The bank has collaborated with DataChain, a startup specializing in blockchain interoperability, as well as TOKI, a cross-chain bridge solution based on DataChain’s technology.
The primary objective of these collaborations is to support cross-chain swaps, payments, and lending across public blockchains. For instance, Progmat Coin could be used for settling NFT purchases on different blockchains.
TOKI, established in Dubai earlier this year by a DataChain executive, plans to launch its bridge and introduce its own crypto token later in the year. By operating liquidity pools with Progmat Coins on multiple blockchains, TOKI will enable seamless transactions across networks.
Although the solution appears to be primarily targeted at the Japanese market, it remains unclear whether users will be required to undergo Know Your Customer (KYC) compliance measures to hold the stablecoins. Further clarification on this matter is being sought.
As MUFG pioneers the issuance of bank-backed stablecoins through Progmat Coin, the development signifies a significant step towards the integration of traditional banking and blockchain technology, with potential implications for global financial systems.
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