Japan’s Largest Bank MUFG Will Promote Digital Currency For Inter-company Payments

Key Points:

• Japanese giants MUFG and Mizuho unite for digital currency solutions in intercompany payments.
• Stablecoins, backed by real-world currencies, will be the foundation of their 2024 initiative.
• MUFG prioritizes industry collaboration for digital asset innovation.

In a significant development, two major Japanese financial institutions, Mitsubishi UFJ Financial Group (MUFG) and Mizuho Financial Group (Mizuho FG), have announced their partnership to explore the world of digital currency for intercompany payments, as reported by Nikkei.

Under this collaboration, Mizuho FG will join a digital currency initiative set to be launched in 2024, leveraging the shared infrastructure of Mitsubishi UFJ Trust and Banking, a subsidiary of MUFG.

The primary objective of this endeavor is to facilitate more efficient and cost-effective trade payments by harnessing the capabilities of digital currency, which enables near-instantaneous transactions at minimal costs.

This digital currency initiative will be based on stablecoins, which are cryptocurrencies backed by legal tender such as the Japanese yen and the US dollar.

MUFG, Japan’s largest bank, has been actively working on its security token platform, Progmat, for several years. Notably, MUFG expanded its digital asset solutions to include utility tokens, stablecoins, and wallet infrastructure.

The bank recognized the importance of collaborative efforts within the industry to drive innovation and decided to house these solutions in a neutral venture rather than developing them in isolation.

Moreover, MUFG is currently in discussions with various companies, including issuers of popular global stablecoins, to explore the issuance of tokens using its blockchain platform.

Japan’s stablecoin law, effective since June 1, permits only licensed banks, registered money transfer agents, and trust companies to issue such tokens.

MUFG intends to issue stablecoins linked to foreign currencies, including the US dollar, for global use. Additionally, the bank is actively involved in developing security tokens for third-party entities.

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