Technology Alliance to Enable Smooth Mutual Transfer and Exchange of a Wide Variety of Stablecoins in Japan

Datachain, Mitsubishi UFJ Trust and Banking Corporation, and Soramitsu announced a technology alliance to enable smooth transfer and exchange of stablecoins to be issued in Japan.

Alex Harutunian

Mar 29, 2023 - 1 min read

The leading global financial services group and one of the largest banking institutions in Japan, Mitsubishi UFJ Trust and Banking Corporation (MUFG) partnered with Soramitsu, a blockchain technology company, to develop stablecoin settlement solutions on heterogeneous blockchain infrastructure.

In this initiative, Soramitsu will use blockchain interoperability tools of Datachain to conduct a Proof of Concept (PoC) using various stablecoins issued using the MUFG's stablecoin project "Progmat Coin" and digital currencies issued by regional banks Soramitsu's own open source blockchain platform Hyperledger Iroha. Both "permissioned stablecoins" and "permissionless stablecoins", using public blockchains such as Ethereum, are planned in the PoC.

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Progmat Coin is a stablecoin issuance and management platform led by Mitsubishi UFJ Trust and Banking Corporation. It uses Corda as a distributed ledger for the transfer records.

Mutual transfers and exchange among the various stablecoins and local digital currencies issued by various institutions is important for their widescale adoption.

The participants of the alliance believe that stablecoins will be used to minimize friction in the settlement of securities and other digital assets and NFTs, as well as for international remittances and micropayments, thereby improving the convenience of various payment scenarios. By connecting different blockchains in a secure and practical way, they plan to maximize the potential of stablecoins and build advanced use cases for the financial infrastructure that can be used globally.

In 2022, Japan led the world's developed nations in passing a revision of the Payment Services Act defining a stablecoin as an "electronic means of payment." The bill is scheduled to go into effect in 2023, creating excitement in what could be called the "first year of stablecoin." In light of these trends, the proof of concept for the operation of various stablecoins on multiple blockchains developed by the alliance can pave the road for the launch of a full-scale stablecoin solution. We are excited to Observe and report on this project