1. Transition to Next-Generation Infrastructure through On-Chain Transformation
On-chain finance presents both a risk to existing businesses and a prime opportunity to transition banking trust and settlement functions to next-generation infrastructure. MUFG is focusing on creating new value by addressing customer challenges rather than leading with technology.
2. Dual Approach with Stablecoins and Tokenized Deposits
In addition to collaborating with the three megabanks to build a stablecoin platform, there is also a parallel consideration of tokenized deposits, which are highly compatible with banking functions. The focus is on prioritizing real demand areas such as cross-border payments and government bond repo transactions, aiming for early societal implementation through collaboration with diverse players.
3. Expansion of Banking Roles in an AI-Driven Economy
In a future where AI becomes the main driver of economic activity, there will be a demand for programmable financial infrastructure to support autonomous transactions. The role of banks in ensuring safety and security will remain unchanged, and is expected to expand further in society.
──Currently, discussions and implementations of on-chain finance are accelerating both domestically and internationally. How do you view the current status and progress of on-chain transformation in Japan?
Tadashi Yamamoto (hereafter, Yamamoto): On-chain finance is a medium- to long-term critical theme that can provide value such as immediacy and programmability, which were previously difficult to achieve.
While overseas markets, led by the United States, are ahead, I understand that domestic companies are also progressing with considerations towards actual service implementations.
For banks, failing to adapt to on-chain finance could pose a 'threat' as existing revenue areas like deposits, settlements, foreign exchange, and CMS could be captured by external networks. Conversely, it also presents an 'opportunity' to transition the bank's trust, regulatory compliance, customer base, KYC, credit, and settlement functions to next-generation infrastructure.
As MUFG, we aim to address this from the perspective of designing next-generation financial infrastructure, focusing on customer challenges rather than starting with technology.
──Interest in the joint issuance of stablecoins by the three megabanks is very high. What do you think is the significance and social impact of the emergence of jointly issued stablecoins?
Yamamoto: By jointly issuing stablecoins, the three megabanks could potentially create the most widely used stablecoin platform in Japan.
In addition to jointly addressing common challenges such as regulatory compliance and user protection measures in service design, the fact that the three megabanks are driving the consideration of stablecoins through a proof-of-concept is also seen as a significant aspect of their collaboration.
As use cases, we expect utility in achieving rapid cross-border payments and immediate securities DVP realization.
