Banks with a growing presence in Web3? The Japanese group MUFG spoke about the launch of its stablecoin platform, whose assets will notably be deployed on the Ethereum blockchain. It is one more step from the banking sector towards Web3, thus consolidating the solutions and applications developed around blockchain technology.
Japanese banking group MUFG innovates in Web3
To take advantage of the growing interest in Web3, banking institutions are looking to develop innovative solutions linked to blockchain technology. Witness the commitment of the Japanese group Mitsubishi UFJ Financial Group which recently announced the launch of their future stablecoin platform.
👉 What is a stablecoin?
In partnership with the Toki bridge, a “bridge” linking blockchains together, and the Datachain company specializing in blockchain interoperability, the MUFG group is about to launch its Progmat Coin platform. The latter will offer banking institutions the possibility of generating stablecoins backed by the yen.
Future users will be able to carry out exchanges, payments and loans through the Ethereum (ETH) blockchain and its layer 2 Polygon (MATIC), as well as on the Avalanche (AVAX) and Cosmos (ATOM) ecosystems.
According to Tatsuya Saito, CEO of Progmat and vice-president of products within the fiduciary branch of the Japanese banking group, the collaboration between the various partners of the operation is a major asset to guarantee the success of this cross-chain solution :
“TOKI is a crucial element within Progmat’s multi-chain strategy. By strengthening our partnership with TOKI and Datachain, we will focus on developing cross-chain infrastructure using stablecoins issued by Progmat Coin. »
Recall that in June 2022, a month after the collapse of the Terra (LUNA) ecosystem and its stablecoin UST, Japan adopted a bill to regulate these assets. Its flagship measure was the prohibition to issue stablecoins for companies that are not considered as approved banks.
👉 UST and Terra (LUNA): back to the event that definitely marked the beginning of the bear market
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The importance of the banking sector in the development of Web3
Through the first block of the Bitcoin (BTC) blockchain in 2009, its founder Satoshi Nakamoto directly opposed state and commercial banking institutions. However, at present, it is difficult to imagine a Web3 without any intervention from these actors.
One of the main qualities of these institutions is the issuance of stablecoins. Backed by fiat currency, these cryptocurrencies promote the use of decentralized finance applications without suffering the volatility of cryptocurrencies. For now, investors place more trust in centralized stablecoins than in their decentralized counterparts.
Moreover, the lack of banking entities is currently slowing down the development of Web3. According to the latest study published in April 2023 by Adan and KPMG35% of French people would be interested in the idea of using services relating to cryptocurrencies if their banks offer them in the future.
Note, however, the risks associated with banking institutions, such as the potential censorship of transactions and the sharing of personal data. Thus, while banking and financial institutions will deliver their services to the general public, the most tech-savvy people will be able to take advantage of the decentralized solutions offered by blockchain technology.
👉 In France, nearly 10% of the population owns cryptocurrencies (Adan & KPMG Report)
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Source: MUFG
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Always enthusiastic about new technologies, I gradually moved closer to Web3-related activities during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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