MUFG and Binance Japan have began a joint study for the issuance of a new stablecoin pegged to fiat currencies, utilising the ‘Progmat Coin’ platform. Progmat Coin is a stablecoin issuance and management platform compliant with Japanese law.

Through this joint study, Mitsubishi UFJ Trust and Banking Corporation (MUFG) and Binance Japan aim to issue new stablecoins to help accelerate the mass adoption of Web3 in Japan. MUFG is conducting the development of the ‘Progmat Coin’ platform as an infrastructure for issuing stablecoins in accordance with the revised Payments Services Act enforced in June 2023. MUFG has also announced various technology partnerships for the mutual transfer and exchange of stablecoin issuance on various blockchains, including public blockchains such as Ethereum.

Various brands of stablecoins based on the ‘Progmat Coin’ platform will be available for issuance and circulation as soon as the intermediaries handling them have completed their license registration with the relevant authorities. Binance Japan's strategic initiatives Binance Japan started offering 34 tokens at the launch of its services for the Japanese market in August 2023, which is one of the largest numbers of tokens offered on any digital exchange in the country. Upon completion of additional license registration required by domestic regulations, Binance Japan strives to enrich its services to gradually close the gap between Japan and global offerings in a compliant way.

Under this partnership between MUFG and Binance, the joint study aims to drive mass adoption of Web3 and foster a thriving Web3 ecosystem in Japan by issuing new stablecoin utilising Progmat Coin platform compliant with the domestic regulations. Overview of the issuance structure Under the revised Payments Services Act enforced in June 2023, there are three options to issue stablecoins (legally termed as 'Electronic Settlement Method'): 'Bank Depositbacked Digital Money', stablecoins issued by licensed Fund transfer service providers ('Fund-transfer type'), and Trust banks ('Trust-type'). Based on the characteristics summarised below, the joint study will be based on 'Trust-type' stablecoins which both parties believe have the advantage in terms of flexibility in issuance and usability.

The key features of this issuance structure include the issuance applicant being Binance Japan Inc, with Mitsubishi UFJ Trust and Banking Corporation serving as the issuer or trustee. The placement of underlying assets (deposits) can originate from any financial institution and may involve Japanese Yen (JPY) and foreign currencies. Binance Japan operates as the intermediary, and there's potential for expansion to multiple blockchains like BNB Chain, in addition to Ethereum.

In order to be able to handle stablecoins (Electronic Settlement Methods) as a business in Japan, it is compulsory to obtain the newly established ‘Electronic Settlement Methods Transaction Business Provider’ license under the revised Payments Services Act. Both companies intend on commencing stablecoin operations by the end of 2024 upon completion and approval of applicable regulatory approvals by Binance Japan. .