The Bank of Japan will issue a stablecoin pegged to the Yen

The trust banking branch of Mitsubishi UFJ, Japan's largest bank, will create a yen-pegged stablecoin.


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.
MUFG Japan | Image: Global Finance Magazine

The bank hopes to make digital securities more widely available, boosting settlement times and lowering costs.


Mitsubishi UFJ Trust and Banking, Japan's largest bank, will issue a stablecoin linked to the national currency, the Japanese Yen. This is the most significant development in terms of the involvement of Japan's banking sector with cryptocurrencies.


On February 7, Nikkei claimed that the bank would launch a yen-pegged digital currency that could be resolved instantly.


The goal is to make digital securities that "may be bought and sold in tiny chunks, such as commercial real estate" more widely available. This is an improvement over current procedures, which can take up to two days to settle funds.


According to the report, the asset will be used in SBI Holdings and Sumitomo Mitsui Financial Group's digital securities trading market beginning in 2023.


The stablecoin, which is identical to JPMorgan's JPM Coin, is predicted to save millions of dollars in costs as well as a significant amount of time.


At the same time, Japan is considering the release of a central bank digital currency (CBDC), however no significant progress has been made.


Banks and other institutions in Japan are now permitted to produce stablecoins, in part to counter the dominance of private cryptocurrencies.


Japan announced late last year that it planned to decrease the amount of private stablecoins such as USDT.


Stablecoins have been identified as one of the main worries for financial authorities, thus this step is similar to what other countries are doing.


CBDC and stablecoin regulation will be a primary focus in the future


According to global developments, the Japanese financial system's move towards stablecoin releases is a hint of things to come. Stablecoins are seen as a threat to national currencies, prompting a frenzy of regulation, particularly from Japan's Financial Services Agency.


As cryptocurrency becomes more popular, 2022 will be a year of regulation and constraints.