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Japanese Bank Mitsubishi UFJ Trust to Launch Its Own Stablecoin

  • The stablecoin will be issued for commercial purposes with the aim of speeding up settlement processes. It is estimated to be circulating in Japan by next year.
  • Other large Japanese companies are also working to develop their own stablecoins, while Japan’s central bank plans to issue its CBDC before 2026.

Mitsubishi UFJ Trust is planning to issue its own stablecoin in order to streamline its financial operations. Japan’s largest bank in terms of assets, which is headquartered in Tokyo, has fully embraced blockchain technology and its implementation for business purposes, while the cryptocurrency will face operational fines.

The financial entity’s stable currency that will be incorporated into the bank’s payment system and will be linked to the price of the Japanese yen, according to an exclusive report by AsiaNikkei. The bank, which manages around 1.5 billion assets, thus plans to begin operations with cryptocurrencies.

The Mitsubishi token is intended to provide a strong boost to the bank’s payment processes since it will be able to instantly settle securities transactions. Currently, such operations in Japan can take up to 48 hours and come with high fees.

Through its stablecoin, the financial services company hopes to eliminate such costs and improve its payment processes.

On the Flipside

  • Japan’s central bank announced last year that it was conducting proof of concept for a CBDC.
  • The bank has opted to proceed with caution, despite the pressure being exerted by China’s digital yuan.

The Japanese issuer’s announcement was joined by some 70 companies, including the country’s largest banks, among whom was Mitsubishi UFJ Trust, which has since issued their own cryptocurrency. The group of business operations, established last November, issued a common currency based on the yen, called “DCJPY”.

Stablecoin initiatives in Japan are anticipated to further drive the adoption of blockchain technology in the securities trading sector. Other banks to have promoted the use of the technology are the Japanese Trust Bank, along with Daiwa Securities and SBI.

Reports have also circulated about the potential launch of a yen-valued, gold-pegged stablecoin by the Mitsui Group. The launch of the cryptocurrency, called ZipangCoin (ZPG), was announced in February and will be available for purchase on major cryptocurrency exchanges.

The Mitsui stablecoin will be linked to the price of gold on the London Metal Exchange. The value of the ZPG token is equal to one gram of gold, and its payment will be guaranteed by Sumitomo Mitsui Banking.

Regulation of Stablecoins

Stablecoins are expected to face strict regulation in Japan. That is why the launch of the Mitsubishi UFJ Trust token, currently scheduled to debut in 2023, could be subject to certain regulatory measures before its final issuing.

Despite the growing acceptance of cryptocurrencies among businesses, the Japanese government is divided by adverse views on stablecoins. Some officials fear that this class of digital assets could cause severe harm to the country’s financial ecosystem.

"Japan can no longer leave things unattended with global developments on digital currencies moving so fast," an official was quoted as saying by AsiaNikkei. In fact, the Financial Services Agency (FSA) created a division in 2020 tasked with monitoring the regulation of the asset class.

Stablecoins issued by the country’s corporations and large banks will doubtless be in competition with Japan’s central bank currency, the launch of which is expected for 2026, according to remarks made by the bank’s governor, Haruhiko Kuroda.

Why You Should Care

  • Japan is a member of the Group of Seven (G7), marking it as one of the largest and most developed global economies.
  • Japanese companies are showing general increased interest in the use of blockchain technology and digital assets, including cryptocurrencies.
  • Digital operations last year saw an increase of more than 50% from 2020, reaching a cumulative value of approximately 103 trillion yen ($900 billion).

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