Japanese bank MUFG is planning to issue a stablecoin digital currency to enable instant settlement of security tokens, reported Ledger Insights citing a Nikkei Asia report. MUFG Trust has developed a blockchain-based security token platform Progmat, which has attracted many of Japan’s biggest securities firms.
The securities firms include Daiwa Securities, Tokai Tokyo Securities, Mitsubishi UFJ Morgan Stanley Securities and its joint venture partner Morgan Stanley MUFG Securities, au Cubcom Securities, SBI Securities, SMBC Nikko Securities and two unspecified members.
When Japan’s 62 member Security Token Research Consortium outlined a roadmap last October, one of the key requirements was to link to a digital currency system. By enabling P2P settlement between investors, it’s possible to reduce settlement risk, especially between Japan and China. Also, by enabling automated lending, there’s less need for intraday liquidity via the real-time gross settlement (RTGS) system. Plus, a digital currency could support 24/7 trading.
There are multiple other Japanese stablecoin initiatives, including Japan’s Digital Currency Forum, where MUFG is a member. That solution is still at the research stage with Nomura leading the working group for security tokens, but includes multiple banks issuing yen tokens linked to bank balances.