Binance and MUFG join forces to develop stablecoin in Japan

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Binance and MUFG join forces to develop stablecoin in Japan
Credit: © Reuters.

In a significant move in the cryptocurrency sector, Binance, the world's largest cryptocurrency exchange, is partnering with a division of Mitsubishi UFJ (NYSE: MUFG ) Trust and Banking Corporation (MUTB) to explore the issuance of a new stablecoin pegged to legal currencies. This news comes as Binance makes its return to the Japanese market, with the joint research between Binance Japan Inc. and MUTB aiming to develop a stablecoin tied to fiat currencies, including the Japanese yen and other foreign currencies.

The partnership plans to commence stablecoin operations by the end of 2024, subject to regulatory approvals. MUTB will utilize its Progmat Coin platform as the infrastructure for issuing this new stablecoin. The move follows the adoption of a legal framework for stablecoins by the Japanese parliament in June 2022, which stipulates that stablecoins must be pegged to currencies such as yen or other fiat currencies and that their holders must have the right to redeem them at face value.

Takeshi Chino, general manager of Binance Japan, highlighted the importance of stablecoins in the financial ecosystem, stating they can play a crucial role in fostering low-cost cross-border trading and facilitating the trading of other cryptocurrencies. He also emphasized that stablecoins are critical to the successful adoption of Web 3.0.

Vice president of product at MUTB, Tatsuya Saito, echoed Chino's sentiments, expressing confidence that this collaborative stablecoin will significantly contribute to the progress of Web 3.0.

This development follows Binance's return to the Japanese market after acquiring Sakura Exchange BitCoin in November 2022, which led to regulation by the Japan Financial Services Agency (JFSA). This move was in response to warnings from JFSA in 2021 about Binance operating without proper registration. Binance Japan recently launched its services in full and has ambitious plans to offer at least 100 tokens on its platform, representing a threefold increase over the current offering.

Binance's reentry into the Japanese market and collaboration with MUTB mark a significant step forward in the cryptocurrency exchange's expansion and its commitment to adhering to regulatory frameworks.

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