Japanese firms collaborate on yen-backed stablecoin, China signals openness to blockchain technology

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(Kitco News) – A group of Japanese companies, including Mitsubishi UFJ Financial Group – Japan’s largest bank – have joined forces to work on bringing interoperability to Progmat Coin, a yen-backed stablecoin.

According to a report by PR Times, Mitsubishi UFJ is working with Datachain and Solamitsu “to realize a smooth mutual transfer and exchange between a wide variety of stable coins to be issued domestically.”

The so-called “trust alliance” was formed on Tuesday and will use the permissioned Hyberledger Iroha blockchain network as its development base. The trio will test the functionality of Progmat Coin, which is intended to be used by local banks.

The ultimate goal of the project is to help improve settlement times, reduce associated fees, and enable interoperability between Progmat/Corda-based currencies and Iroha currencies, initially targeting those used in Japan.

“This will result in a wide variety of stablecoins and smooth mutual transfers and exchanges between regional digital currencies that will be issued by different banks and other countries, and will be able to streamline interbank, business-to-business and personal transfers,” said the report.

As the project establishes the framework for interbank transfers, future development efforts will focus on cross-border transfers and will involve foreign central bank digital currencies (CBDCs). Japan has previously announced that it intends to implement a bill on stablecoins in 2023, which would allow banks to issue stablecoins.

The Progmat coin was first revealed in 2022 as a way to streamline the settlement process. Progmat is also a platform that currently has a utility token in the works, and the development team has said that native bank-issued stablecoins on Progmat could eventually be used as a settlement for security tokens and to pay for NFTs and crypto-asset transactions.

China moves to establish blockchain standards

As the US government moves to crack down on the crypto industry after years of non-regulation, officials in China have begun adopting a more welcoming approach to blockchain technology despite the ongoing ban on cryptocurrency.

On Tuesday, the Ministry of Industry and Information Technology, China’s regulator of the fintech industry, published a draft copy of its guidelines on the ministry’s website, indicating that it intends to focus on blockchain development as part of its five-year National Economic and Social Development Plan .

“To fully implement the spirit of General Secretary Xi Jinping’s important instructions […] and achieve the long-term goal of adopting the “Guiding Opinions on the Application of Blockchain Technology and Industrial Development”, […] we organized relevant entities to compile and complete the ‘Blockchain and Distributed Accounting Guidelines for the Construction of Technical Standards System (2023 Edition)’,” the announcement said.

The ministry said it is “now openly soliciting opinions from all walks of life,” and provided a feedback form for citizens to share their opinions. The public has until April 28 to provide their input on the draft, and the government plans to provide an update on its recommendations for the blockchain and distributed ledger technology standard system later in 2023.

This development is in line with China’s 5-year plan for “National Economic and Social Development and Vision 2035 of the People’s Republic of China”, which includes a 2025 deadline for certain technological developments.