Blockchain interoperability startup Datachain has launched Project Pax, a stablecoin platform to simplify cross-border business settlements.
Japan’s three largest banks — Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank — are backing the initiative, as announced on September 5.
Project Pax is a collaborative effort involving blockchain firms Datachain, Progmat, and TOKI, with expectations of attracting global financial institutions.
The recent legal revision in Japan primarily introduces a registration system for stablecoins circulation and reinforces anti-money laundering measures. Additionally, it enables overseas businesses to issue stablecoins in the country through custodians of digital assets.
The $182 trillion global cross-border payments market still struggles with speed, cost, and accessibility issues. The G20 has called for “significant improvements” in transparency and efficiency. Project Pax aims to address these problems by using stablecoins for faster, cheaper, and 24/7 cross-border transfers.
The platform seeks to change the limited use of fiat-pegged cryptocurrencies in traditional business operations by positioning stablecoins as a viable tool for enterprise payments. The initiative will leverage Swift’s existing API framework, allowing banks to use Progmat for blockchain-based settlements, while addressing regulatory compliance and operational challenges.
By minimizing the need for redundant fiat currency transfers, the platform reduces costs and improve efficiency for financial institutions.
Separately, Binance Japan is also planning to launch stablecoins denominated in the dollar, euro, and yen in Japan in 2024. The crypto will introduce these tokens, and possibly more, through its partnership with Mitsubishi UFJ Financial Group’s trust banking arm.
Japan’s biggest lender, Mitsubishi UFJ Financial Group (MUFG), also unveiled plans to introduce and distribute stablecoins backed by banks on various public blockchains.
In collaboration with blockchain interoperability specialist Datachain and Toki, a cross-chain bridge, MUFG aims to facilitate seamless interoperability of these authorized stablecoins across multiple blockchains using its Progmat Coin protocol.
MUFG’s blockchain-powered platform is designed specifically for the issuance and management of stablecoins that are pegged to the Japanese yen at a 1:1 ratio. With Progmat Coin, the lender provides a secure solution that ensures stability and familiarity for users within the Japanese market.
MUFG will leverage Toki’s to enhance the transactional capabilities of its stable assets. The startup specializes in enabling asset transfers across various public blockchains such as Ethereum, Cosmos, Avalanche, and Polygon.
