Japan's Three Major Banks Will Participate in Stablecoin Cross-Border Transfer Platform Testing
Japan's Three Major Banks to Test Cross-Border Stablecoin Transfer Platform
Japan's three largest banks – Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMBC), and Mizuho Financial Group – will participate in a trial of a stablecoin cross-border transfer platform. The project, named "Project Pax," aims to provide faster international settlements for businesses.
The initial trial will use a stablecoin issued by Progmat, a blockchain startup backed by the three banks, SBI Holdings, and the Japan Exchange Group. Progmat, Datachain (a blockchain interoperability developer), and cross-chain platform TOKI will collaborate to facilitate cross-chain transaction testing.
Project Pax plans to leverage the existing API framework of SWIFT, allowing banks to instruct Progmat to settle transactions on the blockchain. This helps mitigate anti-money laundering and other compliance challenges. The project states that this approach "allows financial institutions to avoid the operational redundancy of fiat currency transfers and minimize investment costs."
The project will begin with a prototype trial, aiming for commercialization of the stablecoin cross-border transfer platform by 2025. The team wrote in a blog post:
"By combining these regulated stablecoins and truly open and secure cross-chain messaging standards with the current cross-border messaging framework, we are enabling cross-border settlements for businesses at internet speeds."
Progmat has established its "Progmat Coin" stablecoin platform with support from major financial institutions in Japan. The press release states: "(Various) stablecoins issued on the 'Progmat Coin' platform can be denominated in major fiat currencies such as Japanese yen, US dollar, and euro, and can be used flexibly domestically and internationally."
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