MUFG has been quick to embrace a change in Japanese law around stablecoins.
On June 1, a new bill came into effect, setting a governing code around stablecoins – which are a form of cryptocurrency typically backed by a reserve asset.
The bill, passed into law a year earlier, requires that stablecoins be pegged to the yen or other legal tender, with guaranteed redemption to the holder at face value, and that they can only be issued by banks and trust companies.
Almost immediately after the law came into effect, MUFG said that its Progmat Coin platform – originally launched in February 2022 as a universal digital asset payment method for stablecoins, crypto and central bank digital currencies (CBDCs) – would be open to all banks in Japan that wish to launch yen-pegged stablecoins on a range of public blockchains.
The MUFG-backed platform will support bank-backed stablecoins on Ethereum, Polygon, Avalanche and Cosmos. It has been built with technology and security partners Toki and Datachain, which are building a bridge to allow for cross-chain transactions, lending and swaps between the four underlying blockchains. Toki itself is developing liquidity pools across the four blockchains and will release its own crypto token later this year.
