Mitsubishi UFJ Financial Group (MUFG) is in talks with the companies behind popular global stablecoins about issuing stablecoins via the Japanese banking giant's blockchain platform.
Japanese Banking Giant Negotiates to Issue Stablecoin
Japan's stablecoin law, one of the first among major economies, came into effect on June 1, and only the country's licensed banks, registered money transfer agents, and investment companies are allowed to issue tokens.
Tatsuya Saito, the bank's VP of Product, said in an interview that MUFG is in talks with multiple parties to print foreign-currency stablecoins, including the US dollar, for use globally, using the blockchain platform Progmat.
“Issuers and users can feel safe using stablecoins,” Saito said. He declined to specify which stablecoin parties MUFG is talking to.
Stablecoins are an important part of the crypto industry, where investors often deposit funds between transactions involving more volatile tokens. They are intended to hold a fixed value, typically $1, and are often backed by reserves such as cash and bonds.
As a result, regulators have stepped up their scrutiny of stablecoins. Japan's legislation encourages tokens that are fully backed by fiat cash in a matching currency.
He added that the bank is discussing stablecoin projects with entertainment firms, other non-financial businesses and a group of Japanese financial institutions.
Saito also noted that there are requests from overseas financial groups and that Japan could become a global hub for stablecoin issuance.
*Not investment advice.
