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Binance and the Mitsubishi UFJ Trust and Banking Corporation (MUTB) are currently in the exploratory phase of considering the issuance of stablecoins denominated in Japanese yen and various other foreign currencies within the Japanese market.
In a noteworthy collaboration, the cryptocurrency exchange Binance has joined forces with Japan’s largest financial institution, the Mitsubishi UFJ Trust and Banking Corporation (MUTB), to embark on a joint study aimed at investigating the potential issuance of stablecoins within Japan. This endeavor seeks to accelerate the adoption of Web3 technologies within the country. Notably, the partnership intends to leverage MUFG’s stablecoin issuance platform, known as Progmat Coin.
An intriguing aspect of this initiative is that the Japanese bank stands at the forefront of pioneering the development of the Progmat Coin platform, which will serve as a robust infrastructure for issuing stablecoins in accordance with Japan’s recently revised and enforced Payments Services Act. This legislation, which came into effect in June, extends the authority for Japanese banks and regulated cryptocurrency service providers to issue stablecoins.
The Progmat Coin platform currently supports stablecoin issuance on multiple blockchain networks, including Ethereum, Polygon, Avalanche, and Cosmos. There are even discussions of potential expansion to include BNB Chain through a collaborative effort with Binance, as indicated by the exchange.
Takeshi Chino, the General Manager of Binance Japan, emphasized the pivotal role that stablecoins play within the broader financial ecosystem. Beyond offering cost-effective and instantaneous cross-border trade settlement solutions for businesses, stablecoins also facilitate seamless cryptocurrency transactions for retail investors, enhancing accessibility to the crypto space.
Indeed, stablecoins fulfill a critical role in meeting the financial services demands of today and are indispensable for the successful integration of Web3 technologies.
Tatsuya Saito, Vice President of Product at MUFG, envisions the potential growth of Japan’s stablecoin market to a staggering 5 trillion yen (equivalent to approximately $34 billion USD). This projection constitutes around 27% of the estimated current global stablecoin market, which stands at $123.7 billion, according to data from CoinGecko.
Despite encountering substantial regulatory challenges in Western markets, Binance ventured into the Japanese market in August 2023 by offering a selection of 34 tokens.
Meanwhile, Japan’s Orix Bank is reportedly contemplating the issuance of stablecoins within the country. Orix intends to commence testing stablecoins denominated in Japanese yen, United States dollars, and other currencies starting in October, with a planned launch scheduled for 2024. These stablecoins will be backed by fiat deposits and will make use of the Japan Open Chain blockchain, a technology developed by Tokyo-based G.U. Technologies and their partners.
Japan appears well-prepared to introduce stablecoins as a key component of its payment infrastructure. In a recent report by Cointelegraph in August, it was revealed that the Japanese blockchain startup Soramitsu was exploring the establishment of a new stablecoin exchange tailored for cross-border payment systems serving Asian countries.
Additionally, the Japanese government is reportedly considering measures to enable startups to raise public funds through the issuance of crypto assets and stablecoins, signaling a broader acceptance of these technologies within the nation’s regulatory framework.