Japan’s banking giants MUFG, Sumitomo Mitsui and Mizuho to launch US Dollar-Yen-backed stablecoin
- Three leading banking institutions in Japan, MUFG, Sumitomo Mitsui, and Mizuho, are reportedly planning a stablecoin launch.
- The stablecoin targeting cross-border payments will be linked to fiat currencies, including the US Dollar and the Yen.
- Mitsubishi Corporation will be the first institution to pilot the stablecoin.
Three mega financial institutions in Japan, Mitsubishi UFJ (MUFG), Sumitomo Mitsui, and Mizuho, are reportedly planning to issue a stablecoin backed by fiat currencies, including the US Dollar (USD) and the Japanese Yen (JPY).
Mitsubishi Corporation to pilot the stablecoin
The stablecoin will be used to facilitate cross-border payments, according to a report by Nikkei. Mitsubishi Corporation will be the first company to adopt the stablecoin for cross-border payments. However, MUFG, Sumitomo Mitsui, and Mizuho would gradually roll out the platform to more than 300,000 business partners under their umbrella.
Stablecoins are digital currencies built on blockchain technology and backed by fiat and other assets, like Gold, to maintain a stable price. They are designed to work as alternatives to their volatile counterparties, making them suitable for everyday transactions.
The introduction of stablecoins will mark a major step in Japan’s financial ecosystem and boost corporate payments. Regulators in the country are in the process of approving local Yen-backed stablecoins, which will give enterprises access to a new era of payments and cross-border transfers.
Tokenized deposits are also on the radar of Japan’s financial institutions, as seen in Post Bank’s recent announcement about the intended rollout of DCJPY. This tokenized Yen is expected in 2026, signaling growing interest in the asset class.
Ripple’s strategic partner, SBI, is also targeting 2026 for the debut of the RLUSD stablecoin in Japan. RLUSD is an institutional-grade stablecoin issued by Ripple on the XRP Ledger (XRPL).
Stablecoins have become an integral part of the cryptocurrency industry, led by Tether’s USDT and Circle’s USDC. Combined, stablecoins have a total market share of $312 billion, underscoring their role as a transaction medium and a store of value.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Recommended Articles
