Japan’s largest banks team up to bring stablecoins to Cosmos

TOKI and Noble will work with Progmat, a project launched by Mitsubishi UFJ Trust and Banking, to bring Japanese stablecoins to Cosmos

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TOKI, a cross-chain bridge provider and partner of Progmat, will be working with Noble, a token issuance protocol, to bring fully collateralized Japanese stablecoins to the Cosmos ecosystem.

Progmat is a project launched by Mitsubishi UFJ Trust and Banking (MUFG) — the largest bank in Japan, and has the support of over 200 Japanese companies including major banks such as SMBC and Mizuho. The Japan Exchange Group (JPX) is also involved in the project. 

Motoki Yoshida, marketing manager of TOKI, told Blockworks that Progmat is currently building a platform that will enable banks and regulated financial institutions to issue their own stablecoins.

“The basic architecture involves financial institutions interested in issuing stablecoins depositing an equivalent amount of fiat currency with MUFG’s trust bank. Progmat then issues an equivalent amount of stablecoins. The funds in the trust bank are bankruptcy-remote, making this potentially the most secure stablecoin for use on public blockchains,” Yoshida said.

Japan has been making moves in the cryptocurrency world, recently enacting a stablecoin law, otherwise known as the Payment Service Act, which came into effect on June 1, 2023. The law requires that all issued stablecoins must be pegged to the yen or another legal tender.

“In light of this legislation, stablecoins utilizing Progmat are expected to be issued in early 2024. TOKI has partnered with MUFG to bring Japanese stablecoins to public chains and provide a cross-chain infrastructure that uses these stablecoins,” Yoshida said.

So what’s happening on Cosmos?

The TOKI and Noble teams are currently working with Progmat to bring the Japanese stablecoin vision to life, the company told Blockworks.

Although its initial plans are to make these stablecoins available on the Cosmos IBC, the TOKI team hopes that eventually, these stablecoins can be swapped cross-chain with stablecoins on Ethereum, and be used for cross-chain lending. 

The issuance of Japanese stablecoins on Noble is expected to launch in spring 2024. TOKI itself will launch its mainnet in Q4 of this year.


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