TOKI, in collaboration with Noble, a protocol for token issuance, will be joining forces as partners of Progmat to facilitate the integration of fully collateralized stablecoins from Japan into the thriving Cosmos ecosystem.
Progmat, a project initiated by Mitsubishi UFJ Trust and Banking (MUFG), the largest bank in Japan, enjoys widespread backing from more than 200 Japanese enterprises, including prominent banks like SMBC and Mizuho, with the Japan Exchange Group (JPX) also being a key participant in the initiative.
As per Motoki Yoshida, the marketing manager at TOKI, Progmat is presently working on crafting a platform that will empower authorized financial institutions and banks to create and distribute their own stablecoins.
“The basic architecture involves financial institutions interested in issuing stablecoins depositing an equivalent amount of fiat currency with MUFG’s trust bank. Progmat then issues an equivalent amount of stablecoins. The funds in the trust bank are bankruptcy-remote, making this potentially the most secure stablecoin for use on public blockchains,” Yoshida said.
The Payment Service Act, or the stablecoin legislation, was recently enforced by Japan, demonstrating its strides in the cryptocurrency arena, and necessitating stablecoins to be backed by the yen or some other recognized legal tender, with the law taking effect on June 1, 2023.
“In light of this legislation, stablecoins utilizing Progmat are expected to be issued in early 2024. TOKI has partnered with MUFG to bring Japanese stablecoins to public chains and provide a cross-chain infrastructure that uses these stablecoins,” Yoshida said.
What is currently occurring within the Cosmos ecosystem?
According to the information shared by the company with Blockworks, the TOKI and Noble teams are collaborating with Progmat to materialize the vision of Japanese stablecoins.
While the TOKI team’s initial intention is to offer these stablecoins on the Cosmos IBC, they have a broader vision of enabling cross-chain swaps with stablecoins on Ethereum in the future. Additionally, they aspire to facilitate cross-chain lending using these stablecoins.
The anticipated release for Japanese stablecoins on Noble is set for spring 2024. As for TOKI, its main net launch is scheduled for the fourth quarter of this year.
