Binance is working with the largest Japanese bank to launch yen-backed stablecoins
Binance will be allowed to create stablecoins on the compatible Progmat platform for B2B exchanges developed by the Mitsubishi UFJ Trust Bank of Japan.
To comply with the new rules, Binance will work with Mitsubishi UFJ Trust Bank, the biggest financial institution in Japan, to create stablecoins. In 2024, ORIX Bank, a Japanese financial institution, plans to release stablecoins backed in yen and US dollars.
Binance was accepted as an issue partner since it is authorized to provide its services to Japanese traders. When their licensing applications are approved by the Financial Services Agency of Japan, other firms will be permitted to create stablecoins.
In June, it was revealed that public blockchains like Ethereum and Polygon will be able to produce stablecoins backed by the Japanese yen and the US dollar via the use of platforms like Mitsubishi’s. Mitsubishi created the Progmat platform to comply with the “Revised Funds Settlement Act” enacted by the government of Japan.
In 2022, lawmakers officially acknowledged stablecoins as a legitimate kind of digital currency. That’s why financial institutions like banks, trust firms, and money transfer services may issue them. However, businesses that deal in the circulation of assets must have their own special authorization.
Companies in Japan may now utilize new coins to settle international trade transactions without using the country’s domestic banking system. The June statement that followed this discovery included much more detail.
It proved that coins issued by firms on Progmat may be used to buy both NFTs and digital securities. Most stablecoin use will come from business-to-business dealings, which now amount to around 1,000 trillion yen ($6.7 trillion).
According to a report by CCData, stablecoin activity on exchanges has been relatively quiet as the Mitsubishi-Binance agreement has been finalized. Binance saw a drop in BUSD stablecoin volumes after New York officials demanded that BUSD minting be halted by issuer Paxos.
Exchange liquidity may be bolstered by more business-to-business activity in Japan, especially in light of recent declines in market share in Western countries like as Germany, the Netherlands, and Cyprus. As a result of measures taken by US authorities, trade volume in its US operations has dropped by 90%.
Meanwhile, during August and September, trade activity for PayPal’s new PYUSD stablecoin increased by 400%. The new stablecoin is issued by a company called Paxos.