Tatsuya Saito, the Vice President of Product at MUFG, holds a strong conviction that Japan possesses the potential to establish itself as a prominent global hub for the issuance of stablecoins.
There are reports suggesting that Mitsubishi UFJ Financial Group (MUFG), the largest financial institution in Japan, is actively exploring the possibility of leveraging its blockchain platform to issue stablecoins on a global scale.
The bank has previously announced plans to introduce tokens tied to the value of the Japanese yen.
MUFG’s New Crypto Idea Revealed
According to Bloomberg, the company is in discussions with industry leaders and other companies to mint stablecoins pegged to foreign currencies, such as the US dollar, using its Progmat blockchain platform. Vice President of Product, Tatsuya Saito, stated the following:
“The potential partners in this initiative include several local financial institutions, entertainment firms, and other non-financial businesses.”
Additionally, Saito highlighted that there has been a notable influx of inquiries from international entities, underscoring Japan’s potential to emerge as a prominent global hub for stablecoins.
Such financial products have faced increased scrutiny in the Asian country, particularly after the collapse of the algorithmic stablecoin UST last year, which resulted in significant investor losses.
Japanese authorities have recognized stablecoins as digital money but stated that they can only be issued by licensed banks, money transfer agents, or trust companies. Saito praised the recently implemented legislation, emphasizing that it could provide additional consumer protection:
“Issuers and users can feel secure when using stablecoins.”
Under the leadership of Prime Minister Fumio Kishida, Japan’s government has allowed the local crypto industry to flourish by introducing favorable regulations. Last summer, it approved a policy aimed at advancing the Web3 sector in the country.
Furthermore, prominent lobbying groups have advocated for crypto taxation, urging the governing body to reduce tax rates. If their request is approved, domestic companies will be exempt from paying taxes on paper gains from cryptocurrency holdings used for purposes other than short-term trades.
MUFG’s trust banking division initially expressed interest in the matter in February 2022 when exploring the possibilities of launching a stablecoin pegged to Japan’s official currency.
Experts have suggested that such a token could enable the company to enhance its payment network by facilitating instant settlement of securities transactions. Currently, these types of monetary procedures are costly and can take several days to finalize.