To
boost the adoption of Web3 technologies and digital assets in Japan, the cryptocurrency exchange Binance and Japan’s largest bank, the Mitsubishi UFJ
Trust and Banking Corporation (MUTB), have announced a joint study to explore
the issuance of stablecoins in Japan.

Collaborative
Effort to Issue Fiat-Backed Stablecoins

The
collaborative effort seeks to issue yen and other fiat-backed stablecoins to
revolutionize the financial landscape in the country. The
initiative will leverage a platform called „Progmat Coin”. It is designed
to comply with Japanese regulatory standards for stablecoin issuance and
management. The „Progmat Coin” platform, developed by the
Japanese bank, will serve as critical infrastructure for issuing these
compliant stablecoins.

This endeavor aligns with Japan’s recently revised and enforced
Payments Services Act, which permits Japanese banks and regulated crypto providers to
issue stablecoins. It will also facilitate seamless cryptocurrency transactions for retail
investors. Additionally, stablecoins are seen as a crucial component in the successful
adoption of Web3 technologies.

Initially
supporting stablecoin issuance on the Ethereum
blockchain, the platform’s capabilities may expand to include BNB Chain, with the
Binance partnership. This expansion could further diversify the stablecoin
offerings in Japan. Takeshi
Chino, the General Manager of Binance Japan, emphasized the importance of
stablecoins in the broader financial ecosystem. He noted that stablecoins
enable lower-cost and instantaneous cross-border trade settlements for
businesses.

Optimism
Surrounds Japan’s Stablecoin Market Potential

Tatsuya
Saito, the Vice President of Products at MUFG, expressed optimism about the potential
of Japan’s stablecoin market. It is estimated that its growth potential to reach
as high as $34 billion (5 trillion yen). This
projection would account for approximately 27% of the estimated global
stablecoin market, which is currently valued at $123.7 billion, according to
CoinGecko.

Binance
has encountered regulatory challenges in Western markets. However, it took a
significant step towards serving the Japanese market by offering 34 tokens at
the launch of its services in August 2023.

Meanwhile,
Japan’s Orix Bank is considering plans to issue stablecoins within the country.
Orix aims to commence testing stablecoins denominated in yen, dollars, and
other fiat currencies in October, with a targeted launch date in 2024. These
stablecoins will be backed by fiat deposits, utilizing the Japan Open Chain
blockchain developed by Tokyo-based G.U. Technologies and its partners.

Japan
appears well-positioned to pioneer the adoption of stablecoins for payment
rails. It is demonstrated by several financial institutions and startups
exploring similar initiatives. In
August, it was reported that the Japanese blockchain startup Soramitsu has been exploring the development
of a new stablecoin exchange for a cross-border payment system spanning Asian
countries.

Additionally, the
Japanese government has signaled its intention to permit startups to raise
public funds through the issuance of cryptocurrency assets and stablecoins.
These developments underscore Japan’s commitment to embracing the potential of
stablecoins and blockchain technology in its financial ecosystem.

As
Binance and MUTB embark on their
collaborative journey to issue stablecoins in Japan, the partnership is poised
to reshape the country’s digital financial landscape and advance the adoption
of Web3 technologies in the region.

Binance Raises Concerns over
MiCA Regulation’s Impact on Stablecoins

In
a recent Finance Magnates report,Binance voiced its concerns
regarding the impending Market in Crypto Asset (MiCA) regulation and its
potential impact on stablecoins. Scheduled
to take effect in June 2024, MiCA’s provisions on stablecoins have raised
uncertainties for the cryptocurrency exchange.

During
an online public hearing hosted by the European Banking Authority (EBA), Marina
Parthuisot, the Head of Legal at Binance France, expressed apprehension about the
lack of project approvals. She
warned that Europe might face a delisting of all stablecoins by June 30. This
move could significantly affect the European crypto market compared to the
global landscape.

The
European Banking Authority (EBA) and the European Securities and Markets
Authority (ESMA) work on refining MiCA details. However, concerns remain about
how the regulation will apply to decentralized and foreign issuers. Stablecoins,
designed to provide stability amidst crypto volatility. They are closely
watched as they navigate these regulatory waters.

Separately,
Binance’s CEO, Changpeng Zhao („CZ”) refuted rumors of stablecoin
delisting. However, he emphasized the ongoing efforts to launch fully compliant EUR
and other stablecoins.

This article was written by Tareq Sikder at www.financemagnates.com.