One of Japan’s major banks, the Mizuho Financial Group, will join Mitsubishi UFJ Financial Group (MUFG) in its stablecoin issuance platform that remains under development, according to Nikkei Tuesday.
See related article: Japan exempts cryptocurrency issuers from 30% tax on unrealized gains
Fast facts
- The new stablecoin aims to provide an alternative to traditional trade finance that can be costly and time-consuming. The platform will be capable of settling cross-border transactions instantly at zero cost.
- The new network will be operated by Progmat, a company that Mitsubishi UFJ Trust will establish next month in partnership with major Japanese banks, the Japan Exchange Group and NTT Data.
- Mitsubishi UFJ Trust and Banking is spearheading development of the platform, which is expected to be established as early as in 2024.
- Mitsubishi UFJ Financial Group is a Japanese financial services group with total assets of approximately US$3.1 trillion.
- Meanwhile, Mitsubishi UFJ Trust and Banking and Web3 developer Ginco will introduce Japan’s first “crypto asset trust,” in a collaboration to improve custodial services for digital assets and tackle Japan’s thorny token taxation issue.
- The trust will lobby for an “appropriate taxation system” for crypto asset issuers and investors in Japan. Such a system will make the country “a healthy and attractive environment” for crypto investment, an English-language press release said Wednesday.
- In the partnership, the trust arm of MUFG will serve as trustee and will oversee custody of the crypto assets held in the trust. Ginco will provide crypto wallet and digital asset management services.
- A trust is a legal vehicle that allows a third party — known as trustees — to hold and direct assets on behalf of a beneficiary. The crypto asset trust operated by MUFG and Ginco will allow customers to invest in crypto without directly transacting in the underlying assets.
- Japanese crypto advocates often describe the country’s tax system as a stumbling block preventing domestic and overseas crypto developers from setting up shop in Japan.
- Until June, corporations in Japan that issue and hold crypto assets were subject to year-end market valuation and taxation on unrealized profits. But a June 20 revision to the tax law by the country’s National Tax Agency exempted crypto assets held in certain trusts.
- The MUFG-Ginco digital asset trust aims to start operations by the end of fiscal year 2023. Eight Japanese digital asset firms — including venture capital firm Infinity Ventures Crypto and NFT developer Financie — will also participate in the trust.
- KEB Hana Bank, one of the largest financial institutions in neighboring South Korea, announced on Tuesday that it too will offer digital asset custody services from the latter half of 2024. Hana will partner with crypto service provider BitGo Trust Company on the project.