MUFG plans bank-backed stablecoin issuance on public blockchains – Ledger Insights

Today, Japan’s largest bank MUFG announced that its Progmat Coin solution will be used to issue native bank-backed stablecoins on several public blockchains, including Ethereum, Avalanche, Cosmos and Polygon. The work is at an early stage, so the timeframe for the launch was not confirmed.

Progmat Coin is designed to support stablecoin issuance from various trust banks, not just MUFG. Yesterday, new legislation came into effect, allowing Japanese trust banks to issue stablecoins.

We previously reported that MUFG was working on blockchain interoperability startup DataChain. It also collaborates with TOKI, a cross-chain bridging solution for public blockchains based on DataChain’s technology. The goal is to support cross-chain public blockchain exchanges, cross-chain payments, and cross-chain lending. For example, the purchase of an NFT can be settled with a Progmat coin on another blockchain.

TOKI will enable this by running liquidity pools of Progmat coins on multiple blockchains. TOKI was established in March this year in Dubai by a DataChain leader and plans to launch its bridge later this year and issue its own crypto token.

We believe the solution is primarily focused on the Japanese market and have asked whether users must go through familiarity with customer compliance in order to hold stablecoins.

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Progmat also makes security tokens

The Progmat platform also supports security and utility tokens, with some of these potentially involving cross-bridges in a similar fashion. Numerous security tokens have already been issued. MUFG founded Progmat, but the platform is being transformed into a joint venture with the support of the country’s main exchange operator JPX, Mizuho, ​​SMBC, SBI and others.

Progmat’s core platform uses R3’s Corda enterprise blockchain. Datachain’s technology is based on Cosmos’ IBC, and the core has been open source such as Hyperledger YUI Lab. It has also partnered with JCB, Japan’s card equivalent of Visa.

Meanwhile, the first systemic bank to issue a stablecoin on a public blockchain was Societe Generale with its EUR CoinVertible in April. Apart from the first issue of 10 million euros, there have been no transactions so far. Brazilian investment bank BTG Pactual launched a US dollar-denominated stablecoin earlier that month.