MUFG partners with Soramitsu for Progmat stablecoin interoperability – Ledger Insights
Today, a four-way Japanese collaboration was unveiled for digital currency interoperability between MUFG, the MUFG-founded Progmat Coin platform, Soramitsu and Datachain. Together, they plan to conduct a Proof of Concept for the interoperability of bank-issued stablecoins and regional digital currencies running on different blockchains.
With Japan’s stablecoin regulations coming into effect this year, the goal is to achieve payment efficiency and lower fees for interbank payments, as well as consumer and personal transfers. Another potential benefit is to carry out 24/7 transactions rather than being limited by the bank’s opening hours.
A year ago, MUFG unveiled Progmat Coin, a platform that aims to support native bank-issued stablecoins from multiple issuers. It wants these to be used as collateral for security tokens, to pay for NFTs and crypto-asset transactions, so interoperability is necessary. That’s why it partnered with interoperability firm Datachain last September. The program runs on R3’s Corda enterprise blockchain.
There were also future plans to issue stablecoins on the public version of Ethereum.
Separately, Japan’s Soramitsu is known as the original developer of the Hyperledger Iroha blockchain used by the high-profile Bank of Cambodia’s digital currency Project Bakong which has been in production since 2020. Soramitsu is also involved in several other digital currency initiatives in the region, including Laos and the Philippines as well as some Japanese Regional Digital Money Initiatives. It first partnered with Datachain for interoperability in 2021.
The latest project aims to enable interoperability between Progmat/Corda-based currencies and Iroha currencies, initially targeting those used in Japan. A future iteration will explore cross-border payments.
Conceptually, money does not move across blockchains. It stays on the same, but the ownership changes. But if you exchange a digital currency on one blockchain with money on another blockchain, the transactions on both chains must happen atomically. In other words, they happen simultaneously, and if one part of the transaction fails, they must both fail.
Datachain is the first developer of YUI, an interoperability protocol that is a Hyperledger Lab. The company has also worked with Japanese card company JCB on blockchain interoperability.
