Mitsubishi UFJ Financial Group (MUFG), Japan's banking giant, is taking steps towards stablecoin issuance by negotiating with the companies behind popular global stablecoins. The stablecoin law in Japan took effect on June 1, and only licensed banks, registered money transfer agents and investment companies are allowed to issue tokens.

Tatsuya Saito, MUFG's Vice President of Product, stated that he is in talks with multiple parties to issue stablecoins to be used internationally, including US dollars, through the blockchain platform Progmat. “Exporters and users using stablecoins will be able to feel safe,” Saito said. However, there was no information on which stablecoin parties MUFG is negotiating with.
Stablecoins are important tools in the crypto industry to reduce the frequency with which investors trade between more volatile tokens. Such tokens usually represent a fixed value such as $1 and are backed by reserves such as cash and bonds.
Hence, regulators are increasing their control over stablecoins. Japan's legislation, on the other hand, encourages tokens that are fully backed by fiat cash in a matching currency.
It is stated that MUFG is also in talks with entertainment companies, non-financial businesses and Japanese financial institutions on stablecoin projects. Saito stated that they are also receiving requests from overseas financial groups and that Japan could become a global hub for stablecoin issuance.
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