Japan’s largest bank, the trust banking arm of Mitsubishi UFJ, will issue a stablecoin pegged to the yen. The bank wants to popularize digital securities, improving settlement times and reducing costs.
Japan’s largest bank, Mitsubishi UFJ Trust and Banking will release a stablecoin pegged to the national currency, the Japanese Yen. This is the biggest development in terms of Japan’s banking system’s involvement with cryptocurrencies. Nikkei reported on Feb 7 that the bank would issue a yen-pegged digital currency that can be settled immediately.
The idea is to popularize digital securities that “can be bought and sold in small lots, such as commercial real estate.” This is an improvement over current systems, in which funds settlements can take up to two days. The report says that the asset will be used in the digital securities trading market of SBI Holdings and Sumitomo Mitsui Financial Group starting in 2023.
The stablecoin, which is similar in nature to the JPM Coin of JPMorgan, is expected to save millions in dollars in cost, as well as a lot of time. At the same time, Japan is looking into releasing a central bank digital currency (CBDC), though no major developments have taken place. Japanese authorities have allowed banks and other institutions to issue stablecoins, which in part is an attempt to curb the influence of private cryptocurrencies.
Late last year, it was revealed that Japan wanted to reduce the number of private stablecoins like USDT. This move is similar to what other countries are focusing on, as stablecoins have been marked as one of the biggest concerns for financial regulators.
CBDC and stablecoin regulation to be a major theme going forward
The Japanese banking system moving into stablecoin releases is a sign of the things to come, going by developments across the world. Several countries are now working on CBDCs, with the aim of limiting the impact of cryptocurrencies.
Stablecoins are perceived as a threat to national currencies, which is why there has been a mad scramble to form regulation around it, including from Japan’s Financial Services Agency. The U.S. Treasury has also remarked on stablecoin regulation and is likely to introduce some legislation this year.
2022 will be a year of regulation and limitations, as crypto grows more popular. Countries are warming up to crypto, but do not want it to reduce the importance of national currencies.