Mitsubishi UFJ Trust, Japan’s largest bank by assets, plans to issue a yen-pegged stablecoin under the revised Regulations and Payments System Law that will come into effect next year, according to Nikkei.
The Progmacoin stablecoin will be used for clearing and settlement of digital securities. It is intended to provide instant settlement of securities transactions using blockchain for trading and cryptocurrency for payment, according to the report.
See also: Japan to propose to limit stablecoin issuance
Mitsubishi UFJ Trust has partnered with SBI and Daiwa Securities to promote the use of blockchain-based securities. Progmacoin will be used in the settlement of digital securities on the SBI and SMBC digital securities exchange, which is expected to go live in 2022.
According to a December PYMNTS report, the Japan Financial Services Agency (FSA) has revised legislation to only allow banks and wire transfer companies to issue stablecoins.
Under the revised law, Japanese financial institutions will likely be able to issue stablecoins in the country for the settlement of securities transactions. Currently, the settlement of corporate actions takes several days with high overhead costs.
Read more: Bank of Japan begins CBDC testing
The Mitsubishi UFJ Financial Group (MUFG) is one of the world’s largest financial groups and is listed on the Tokyo, Nagoya and New York stock exchanges. The group includes MUFG Bank, Ltd., Mitsubishi UFJ Trust and Banking Corporation, Mitsubishi UFJ Securities Holdings Co., Ltd., Mitsubishi UFJ NICOS Co., Ltd. and Mitsubishi UFJ Lease & Finance Company Limited.
MUFG offers commercial banking, fiduciary banking, securities, credit cards, consumer credit, asset management, leasing and other financial services. The banking group has the largest overseas network of any Japanese bank, with offices and subsidiaries in more than 50 countries.
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