The financial services firm – Mitsubishi UFJ Trust – hopes to improve its transaction system by using blockchain technology for trading and a cryptocurrency for payments. As such, it will create a stablecoin pegged to the value of the Japanese yen, a new report has claimed. Mitsubishi’s Stablecoin According to a recent report from Nikkei Asia, Mitsubishi UFJ Trust – a Tokyo-based bank with more than $1.5 trillion in assets under management – is trying to enter the world of crypto by issuing its own digital asset. The financial product will be a kind of stablecoin, pegged to Japan’s national currency. The token allows the institution to boost its payment process and settle securities transactions immediately. Currently, such monetary procedures take a few days and cost tens of millions of dollars a year in Japan. Many expect that using a stablecoin can eliminate that cost. In addition, the initiative aims to stimulate the use of blockchain technology in securities trading. The Japanese Trust Bank has promoted its use in conjunction with Daiwa Securities and SBI. Digital securities enable investments in a more flexible format. Blockchain technology, for example, has turned traditional assets such as real estate or corporate bonds into products that can be bought in small quantities, opening the doors for retail investment. Japan – one of the most developed economies in the world – is a major player in the cryptocurrency industry. At the same time, locals have recently shown a growing interest in the asset class. In 2021, digital transactions showed an increase of more than 50% from 2020, reaching more than 103 trillion yen ($900 billion). Stablecoins Could Face Strict Regulations It is safe to assume that Mitsubishi UFJ Trust’s project could face some regulatory backlash ahead of launch. Last summer, some Japanese officials believed that stablecoins could harm Japan’s financial ecosystem, and for that reason, they should be closely monitored. “Japan can no longer leave things unattended now that global developments in digital currencies are moving so fast,” said one of them. In 2020, the Financial Services Agency (FSA) established a department to oversee the regulation of cryptocurrencies. Shortly thereafter, the Treasury Department considered expanding the staff needed. The possible regulation could benefit the Bank of Japan, which wants to issue a CBDC. Trials are expected to begin sometime this year, while the first release of the product could come around 2026, Governor Haruhiko Kuroda outlined. Featured Image Courtesy of World Finance Informs SPECIAL OFFER (Sponsored) Binance Free $100 (Exclusive): Use this link to register and get $100 free and 10% off the fees on Binance Futures first month (Terms and Conditions). PrimeXBT Special Offer: Use this link to register and enter POTATO50 code to get 25% off trading fees.
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