Why Binance and Banking Giant MUFG Want to Issue Stablecoins in Japan

Binance Japan and Mitsubishi UFJ Trust and Banking Corporation (MUTB) are exploring the development of stablecoins pegged to fiat currencies like the yen. The move comes as new regulations have opened avenues for trust banks to explore stablecoin offerings.

The stated goal of the partnership is to drive Web3 adoption in Japan. Binance Japan and MUTB plan to study the issuance of stablecoins that could be deployed on multiple blockchains, including Ethereum and Binance’s BNB Chain.

MUTB is also exploring the possibility of using its platform, dubbed “Progmat Coin,” as infrastructure for stablecoin issuance. The platform has permissions under new stablecoin rules that kicked in this June that let Japanese exchanges apply for a special license to trade stablecoins – even those issued overseas, like tether (USDT) and USD Coin (USDC).

The involvement of a TradFi giant like MUTB also adds some legitimacy to the initiative. MUTB is leading a consortium of banks and trust banks that plans to issue stablecoins on private and public blockchains through a compliant platform called Progmat Coin, which Binance Japan also intends to use.

Japan seems to have embraced Web3 and stablecoins when other jurisdictions have shied away, with the country releasing a roadmap to boost Web3 growth in April and promising greater oversight to ensure consumer protection. MUTB also claims its Progmat platform could help mitigate some of the risks inherent to stablecoins that regulators fear.

Binance Japan and MUTB hope to start relevant operations by the end of next year. However, the study does not translate to a promise to issue stablecoins, and Binance Japan still has to secure “applicable regulatory approvals” before issuing anything.

Here are some of the key reasons why Binance and MUFG are interested in issuing stablecoins in Japan:

• The growing popularity of Web3: Web3 is a new paradigm for the internet that is based on decentralized technologies like blockchain. It is gaining popularity in Japan and around the world, and stablecoins are seen as a key component of the Web3 ecosystem.
• The need for a stable and regulated cryptocurrency: Stablecoins are pegged to a fiat currency, such as the Japanese yen, which makes them more stable in price than other cryptocurrencies. This makes them more attractive to investors and businesses that want to use cryptocurrencies for payments or other purposes.
• The supportive regulatory environment in Japan: Japan has been relatively supportive of cryptocurrencies, and it has recently introduced new regulations that are specifically designed for stablecoins. This makes Japan an attractive market for Binance and MUFG to issue stablecoins.

It remains to be seen whether Binance and MUFG will be successful in their efforts to issue stablecoins in Japan. However, the partnership is a sign of the growing interest in stablecoins and the potential of Web3 in the Japanese market.