The largest bank in Japan, Mitsubishi UFJ Financial Group Inc, is in the midst of negotiations with global stablecoin issuers to release its own tokens on its blockchain platform. Beginning on June 1st, Japan’s stablecoin law has come into effect, permitting licensed banks, trust companies, and registered money transfer agents to issue these cryptocurrencies. MUFG is presently in discussion with multiple parties to deploy its Progmat blockchain platform for the purpose of issuing stablecoins linked to foreign currencies such as the US dollar.
According to MUFG’s Vice President of Product, Tatsuya Saito, issuers and users will have increased confidence in using stablecoins now that the law has been enacted. Stablecoins have become an important component of the cryptocurrency market, offering investors a dependable asset for holding funds during trades wherein more unstable tokens are involved. These stablecoins carry a steady value, frequently pegged to $1, and are often supported by reserves including cash and bonds.
At the moment, there are approximately $130 billion in stablecoins in circulation. Consequently, regulators have stepped up their focus on stablecoins in response to their rising popularity. In Japan, regulations have been introduced to encourage the full backing of stablecoins by fiat cash in a corresponding currency, assuring greater stability and transparency.