Japan’s three major banks to test cross-border stablecoin transfer platform

Japan’s three megabanks — MUFG, SMBC and Mizuho — are set to trial a cross-border stablecoin transfer platform, aiming to offer faster international settlement for enterprises.

The pilot test, dubbed “Project Pax,” will leverage the stablecoins issued via Progmat, a blockchain startup backed by these three banks, SBI Holdings and Japan Exchange Group, according to a Thursday press release. The project will be run by Progmat, Datachain and TOKI to facilitate the testing of cross-chain transactions.

The project plans to use SWIFT’s existing API framework for banks to instruct Progmat to settle on blockchain networks. That can help address anti-money laundering and other compliance challenges. “This enables financial institutions to avoid operational redundancy with fiat currency transfers and minimize investment costs,” the project said.

The “Project Pax” is set to commence with a prototype and aims to commercialize the platform by 2025, according to its statement.

“By integrating these regulated stablecoins and truly open and secure cross-chain messaging standards with the current cross-border messaging framework, we’re enabling cross-border settlements for enterprises at the speed of the internet,” the team said in a separate blog post.

Progmat, with backing from several major financial institutions in Japan, has established its “Progmat Coin” stablecoin platform. “[Various] stablecoins issued using the ‘Progmat Coin’ platform can be denominated in major fiat currencies such as JPY, USD, and EUR, allowing for flexible use domestically and internationally,” the project added.