In an advanced report, Binance Japan announced plans to partner with Mitsubishi UFJ Trust and Banking Corporation (MUTB) to onboard masses to Web3 and the crypto sector. The announcement conveyed on September 25 revealed that Binance and MUTB will conduct extensive research to introduce the issuance of stablecoin in its product offering.
The proposed study aims to improve the issuance of Japanese yen and other local fiat currencies backed by stablecoins. Also, Binance and MUTB seek to attract a large audience to the Web3 sector.
Binance Japan Partners with MUTB
The report indicates that Binance will leverage MUBT proprietary tools, including Progmat Coin, a distinctive stablecoin issuance platform, to support Japanese crypto entrepreneurs in attaining the desired results.
Subsequently, the MUBT will focus on enhancing the Progmat Coin platform to align it with the new regulation on stablecoin. At the beginning of this year, the Japanese regulators Financial Services Agency (FSA) revised the Payment Service Act to ensure the safe use of crypto assets.
Under the new FSA, the regulators plan to restrict the circulation of stablecoins. In June, the FSA enacted the revised rules on stablecoin issuance in Japan.
Reportedly, the FSA regulation restricted the issuance of stablecoins to financial institutions such as banks and money exchange platforms. The revised regulation groups stablecoin in a different category from crypto assets.
Notably, the FSA restrictions forced MUBT to restructure its Progmat Coin, to facilitating transactions involving certain stablecoins’. Based on the nature of Progmat Coin, the platform only supports stablecoins attached to Ethereum (ETH), BNB Chain (BNB), Cosmos (ATOM), and Avalanche (AVAX) networks.
Factors Contributing to Growth of Japanese Stablecoin Industry
Speaking to the media, Binance Japan general manager Takeshi Chino explained the significance of stablecoin in the financial sector. The executive outlined the common features of stablecoins, including their cost effectiveness and efficiency in cross-border transactions.
Chino admitted that the stablecoin exhibits massive potential to support seamless transactions among retail clients. It implies that stablecoin plays a critical role in redefining the financial landscape.
Also, stablecoin supports the mainstream adoption of Web3 technologies. An analysis shared by MUBT head of product development Tatsuya Saito demonstrated that Japan’s stablecoin market will experience exciting growth in future. The official envisages that the Japanese stablecoin industry will reach $34 billion, equivalent to 5 trillion yen, in the coming days.
Compared with the current global stablecoin market, which stands at $123.7 billion, Japan will constitute 27%. Saito’s prediction validates a study conducted by Bernstein on estimating the growth of the stablecoin industry in the next five years. The investment company Bernstein forecasted that the global stablecoin industry will reach $2.8 trillion in 2028.
Expanding the Use Case of Stablecoins in Payment Sector
The Bernstein report stated that launching stablecoins in consumer sector will create a bullish market structure for the industry. The attractiveness of the Japanese stablecoin market has inspired Orix Bank to support the issuance of the digital token.
In an interview with Nikkei Asia, the Orix team revealed plans to begin testing the issuance of Japanese yen, dollar among other stablecoins pegged to deposits. The bank stated that the impending trial testing will be conducted in the Japan open chain blockchain network owned by G.U technologies.
The Orix team plans to officially issue stablecoin next year to support the growth of the financial sector. The report indicates that the Orix team plans to formulate a proposal for the use of stablecoins as a payment method in the automotive industry.
The bank suggests that despite the new regulation on stablecoin, businesses could create their digital coins and liaise with qualified financial institutions to support the issuance. The Orix team believes introducing the stablecoin payment features in fast-paced automotive firms such as Toyota Motor could accelerate business success and reduce costs.
The Orix projects that if Toyota could integrate stablecoin payment, they would save 100 trillion yen in cost. Last month, Soramitsu, a Japanese blockchain company, was developing a cross-border payment system to support the adoption of stablecoins.
The Soramitsu team plans to integrate the Cambodia Central Bank Digital Currency (CBDC) to establish a solid interconnection of the payment system in India, China, Japan, and other Southern Asian countries.