Japan’s financial institution Mitsubishi UFJ Bank plans to launch a stable coin, Progmacoin, pegged against the Yen to settle transactions immediately.
The bank has plans to launch its own digital security exchange. The bank can settle transactions instantly once it launches the exchange. It will remove the need for data entry, which delays the completion of transactions. Banks can save millions of dollars by using blockchain technology, as it will do away with the recording of transactions on ledgers.
Nikkei will use the stable coin to clear and settle all bank-related digital transactions and provide speedy and safe services to investors.
Progmacoin Digital Currency
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Japan’s digital currency is the Progmacoin, a yen-pegged stable coin. The stable coin will help to clear settlements immediately. Banks delay the transaction process for customers under the regular method, as it involves recording and updating data. Speed, transparency, and cost-effectiveness will be the strong points of Progmacoin once it is introduced.
Japan’s Mitsubishi has plans to launch Progmacoin by 2023. It will clear and settle digital transactions immediately. The idea was to make bank transactions easier without entering the data into ledgers. It will reduce data entry costs and result in speedy transactions. It will increase transparency as it is automatically visible to everyone.
Progmacoin will not be the first stable coin. Previously, Japan planned to launch the DCJPY digital currency pegged to the Yen. Mitsui & Co, a trading firm in Japan, intends to bring the ZipangCoin, another stable coin that will be pegged to gold.
Digital Alternative to Banks
There are risks attached to the cryptosystem, but virtual currencies are gaining popularity, and central banks are now looking into the positive aspects of the crypto sector.
Banks may issue stablecoins once the revised law takes place next year in Japan. Transaction settlement will take place immediately. Regular currencies take around two days to settle transactions. Digital options are attractive to banks, and more banks are gaining entry into the crypto sector.
Central and private banks are looking into blockchain as the emerging sector in various countries. In Japan, Mitsubishi UFJ Bank is the biggest financial institution and its entry into the crypto sector will encourage other financial institutions to enter the market.
Blockchain Technology
By using blockchain technology, transactions are entered automatically into ledgers. It removes the need for recording data and brings in speedy transactions. Blockchain technology makes data entry transparent and secure. No tampering of data is possible on the blockchain, which eliminates fraudulent practices.
On blockchains, the ledger can be viewed by everyone simultaneously. It provides transparency, and no data can be rewritten or altered. It increases trust and security. Data are easily traceable as they are shared across the business network. Blockchains enable the safe recording of data and provide its historical record, which is easily updated.
Mitsubishi UFJ will use blockchain technology and cryptocurrency payment to accelerate the settlement of speedy transactions.
Mitsubishi is the largest financial institution in Japan, and it will partner with Daiwa Securities and SBI to introduce digital securities. The bank will launch a digital security exchange soon through this partnership. The exchange from Mitsubishi will compete with the Tokyo Stock Exchange.
The crypto market is very volatile in nature, and banks generally avoid using them. But now, people prefer to invest in the crypto sector. Stable coins are less volatile than other leading cryptos like Bitcoin, Ethereum, and Dogecoin. They have the utility of fiat coins and are profitable like crypto.
The stable coins are cryptocurrencies backed by assets like gold and the US Dollar. Unlike other cryptocurrencies, they are not very volatile. Tether and USD Coins are examples of stable coins. They are a
Dai, Binance USD, and TerraUSD are other widely popular stablecoins. Investors prefer stablecoins, as they bridge digital money and fiat currencies.
More and more investors are entering the crypto market, despite its extremely volatile nature. Central banks in many countries are trying to capitalize on the crypto market. Japan is the latest to join the crypto band.
Cryptocurrencies in 2022
Leading cryptocurrencies Bitcoin and Ethereum slipped lower in January 2022. However, it shows signs of recovery in February 2022.
Bitcoin is trading at $41,977 during trading hours on Thursday, February 17, 2022. It slipped to $34,100 in January. In November 2021, it zoomed to life-highs at $68,400.
Ethereum is trading at $2,968 during trading hours on February 17, 2022. ETH shows signs of recovery in February, after moving lower to $2,317 in January.
Meme coin Dogecoin is trading at $0.1433 on February 17, 2022. DOGE surged to life-highs at $0.7254 in May 2021.
High inflation is driving investors towards cryptocurrencies. Fiat currencies such as the US Dollar, the Euro, and the GBP are losing value in the forex market with rising inflation. High inflation in a country pulls down the value of fiat currencies.
