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MUFG: Japanese public blockchain stablecoins won’t need KYC if trust bank issuer
September 11, 2023
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Earlier this year MUFG announced its Progmat Coin platform could be used to issue stablecoins by multiple banks, including on public blockchains. Today it revealed plans for a National stablecoin study group with numerous other institutions. MUFG advised that pseudonymous public blockchain transactions are possible for some types of stablecoins. In other words, know your customer is not a requirement. And for stablecoins issued via a trust bank, the issuer does not need a license.

Additionally, MUFG confirmed previously announced plans to incorporate Progmat Inc. on October 2, with MUFG retaining 49%. Japan’s second and third largest banks, SMBC (7.5%) and Mizuho (7.5%) are shareholders, as well as Sumitomo Mitsui Trust Bank (7.5%). Other owners include Tokyo Stock Exchange operator JPX (5%), SBI PTS Holdings (5%), NTT Data (13.5%) and Datachain (5%).

“Like the success of the Internet, which was achieved by using the same protocol (standard) across all boundaries, we hope that this one-of-a-kind partnership will lead to the creation of a national infrastructure to make the world of digital assets more convenient,” said Iwao Nagashima, President and CEO Mitsubishi UFJ Trust and Banking Corporation.

Progmat claims to be the largest digital securities issuing platform in the world. Companies often make such claims, but with Yen 127 billion ($868 million) in real world asset token issuances (mainly real estate), this one is accurate.

Now the platform is accelerating its utility token and stablecoin rollout.

No KYC needed for stablecoins

Earlier this year, MUFG announced a collaboration to circulate stablecoins across multiple public blockchains. At the time, we asked whether all transactions would require know your customer (KYC). And now we have the answer.

In June, Japanese legislation came into force supporting different types of stablecoins. Progmat Coin is for trust bank-issued stablecoins. This involves ringfenced balances at the trust bank, which makes them bankrupt remote. In other words, the assets are separate from the trust banks, so if the trust bank goes bust, the assets still belong to the token holders. 

With this type of stablecoin, MUFG says that pseudonymous transfers on public blockchains are allowed and there are no transaction limits. It also says that to issue a stablecoin via a trust bank, no license is required. We’re guessing that’s because the controller or administrator of the stablecoin is a licensed trust bank. That’s not dissimilar to how Paxos Trust issued Binance USD in the United States.

Other types of stablecoins

In contrast to trust bank-issued tokens, for commercial bank-issued stablecoins, KYC is required and there are also no limits on transaction amounts. Unlike other jurisdictions that have partial government insurance, in Japan, insurance covers all deposits. Hence deposit tokens don’t have a significant disadvantage because the assets are not ringfenced.

Meanwhile, the public blockchain integration is being enabled by blockchain interoperability firm Datachain as well as TOKI. This will enable Progmat Coins to circulate across multiple public blockchains. They plan to start with Ethereum, followed by Cosmos, Polygon, Avalanche and others. TOKI takes on a role similar to USDC-issuer  Circle’s Cross-Chain Transfer Protocol (CCTP), which enables coins to be burnt on one public blockchain and reissued on another.

Another key point is that Progmat Coin is not limited to Japanese Yen issuance. So this model can be used for a US dollar stablecoin. MUFG and the other Japanese banks have ambitions to be global players in this area.

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List Of Cardano Wallets

Well-known and actively maintained wallets supporting the Cardano Blockchain are EternlTyphonVesprYoroiLaceADAliteNuFiDaedalusGeroLodeWalletCoin WalletADAWalletAtomicGem WalletTrust and Exodus.

Note that in case of issues, usually only queries relating to official wallets can be answered in Cardano groups across telegram/forum. You may need to consult with specific wallet support teams for third party wallets.

Tips

  • Its is important to ensure that you're in sole control of your wallet keys, and that the keys used can be restored via alternate wallet providers if a particular one is non-functional. Hence, put extra attention to Non-Custodial and Compatibility fields.
  • The score column below is strictly a count of checks against each feature listed, the impact of specific feature (and thus, score) is up to reader's descretion.
  • The table represents current state on mainnet network, any future roadmap activities are out-of-scope.
  • Info on individual fields can be found towards the end of the page.
  • Any field that shows partial support (eg: open-source field) does not score the point for that field.

Brief info on fields above

  • Non-Custodial: are wallets where payment as well as stake keys are not shared/reused by wallet provider, and funds can be transparently verified on explorer
  • Compatibility: If the wallet mnemonics/keys can easily (for non-technical user) be used outside of specific wallet provider in major other wallets
  • Stake Control: Freedom to elect stake pool for user to delegate to (in user-friendly way)
  • Transparent Support: Easy approachability of a public interactive - eg: discord/telegram - group (with non-anonymous users) who can help out with support. Twitter/Email supports do not count for a check
  • Voting: Ability to participate in Catalyst voting process
  • Hardware Wallet: Integration with atleast Ledger Nano device
  • Native Assets: Ability to view native assets that belong to wallet
  • dApp Integration: Ability to interact with dApps
  • Stability: represents whether there have been large number of users reporting missing tokens/balance due to wallet backend being out of sync
  • Testnets Support: Ability to easily (for end-user) open wallets in atleast one of the cardano testnet networks
  • Custom Backend Support: Ability to elect a custom backend URL for selecting alternate way to submit transactions transactions created on client machines
  • Single/Multi Address Mode: Ability to use/import Single as well as Multiple Address modes for a wallet
  • Mobile App: Availability on atleast one of the popular mobile platforms
  • Desktop (app,extension,web): Ways to open wallet app on desktop PCs
  • Open Source: Whether the complete wallet (all components) are open source and can be run independently.

Source

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XDC: xdcc2C02203C4f91375889d7AfADB09E207Edf809A6

 

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