Japan’s Megabanks Trial Cross-Border Stablecoin Transfer

Japan’s three megabanks — MUFG, SMBC, and Mizuho — are set to test a cross-border stablecoin transfer platform aimed at faster international settlements for enterprises.

Project Pax

The pilot test, titled Project Pax, will utilize stablecoins issued via Progmat, a blockchain startup backed by these banks, SBI Holdings, and the Japan Exchange Group, as per a Thursday press release. The trial will be managed by Progmat, Datachain, and TOKI to facilitate cross-chain transaction testing.

Technology and Compliance

Project Pax plans to employ SWIFT’s existing API framework, enabling banks to direct Progmat for settling on blockchain networks. This approach could help tackle anti-money laundering and compliance issues, allowing financial institutions to reduce operational redundancies associated with fiat currency transactions and limit investment costs.

Timeline and Vision

The project is set to start with a prototype and aims for commercialization by 2025. According to a separate blog post from the team, they emphasize integrating regulated stablecoins with open and secure cross-chain messaging for cross-border settlements at internet speed.

Progmat Coin

Progmat has developed its Progmat Coin stablecoin platform with support from major Japanese financial institutions. Various stablecoins issued via the Progmat Coin platform can be denominated in significant fiat currencies such as JPY, USD, and EUR, enabling flexible domestic and international usage.