[NEWS] Mitsubishi UFJ Trust to issue stablecoin "XJPY" for cryptocurrency exchanges

Mitsubishi UFJ Trust and Banking Corporation announced on the 6th that it has begun joint studies with Ginco and Progmat to issue a "cryptocurrency industry-wide stablecoin" aimed at improving the efficiency of fund settlement between cryptocurrency exchanges.

This initiative will utilize Progmat Coin, an issuance and management platform for stablecoins developed by Progmat. The aim is to issue two stablecoins: "XJPY" denominated in Japanese yen and "XUSD" denominated in US dollars.

According to the announcement, the joint study will also involve cryptocurrency liquidity provider Cumberland Global Limited, as well as domestic cryptocurrency exchanges Bitbank and Mercoin.

Mitsubishi UFJ Trust and Banking Corporation pointed out that the background to the joint study was that funds for proprietary transactions between cryptocurrency exchanges and liquidity providers in the global cryptocurrency market are settled using stablecoins. On the other hand, in the cryptocurrency market, including Japanese businesses, bank transfers are the mainstream method of settlement, and issues such as transaction time constraints and remittance costs may be hindering the development of the cryptocurrency market.

Currently, bank transfers for settlement purposes between cryptocurrency-related businesses amount to several hundred billion yen per month for transactions in Japanese yen alone, and are expected to continue to expand in the future, so they have decided to conduct joint studies to resolve these issues.

Mitsubishi UFJ Trust and Banking explains that the issuance of XJPY and XUSD will "contribute to the sophistication of the cryptocurrency market by improving the efficiency of fund settlement."

▶︎Image of fund settlement through the issuance of a cryptocurrency industry-wide stable coin

As a specific issuance scheme, a "trust type" is assumed, based on the revised Payment Services Act that came into effect in June this year. Based on the legal amendments, stable coins are expected to be issued in Japan in three major types: "bank deposit type," "fund transfer type," and "trust type," and among them, the trust type is said to be "the most flexible in design."

The trustor requesting the issuance is Ginco, and the trustee, the actual issuer, is Mitsubishi UFJ Trust and Banking Corporation. Going forward, the relevant parties will accelerate their efforts toward issuance in the summer of 2024.

At present, the cryptocurrency exchanges that will be using the system are Bitbank and Mercoin, but there will be no particular restrictions and applications to participate will be accepted at any time.

Progmat, which handles Progmacoin, was established last month by domestic megabanks, NTT Data, and others. At the same time as its establishment, it was announced that it would partner with domestic cryptocurrency exchange Binance Japan to issue a new stablecoin for both yen loans and foreign currencies.

Reference:Announcement
Image: Quoted from the announcement