India’s CBDC reaches 1 million daily transactions milestone

Binance Explores Stablecoin Issuance on MUFG Progmat Coin PlatformMitsubishi UFJ Trust and Banking Corporation (MUTB), the trust arm of Japan’s largest bank, Mitsubishi UFJ Financial Group (MUFG), has announced a collaborative effort with Binance Japan to investigate the issuance of public blockchain stablecoins denominated in Japanese yen and other currencies.Photo by Aditya Anjagi on UnsplashProgmat blockchain platformAccording to a press release published on Tuesday, the development is centered around MUFG’s Progmat blockchain tokenization platform, which encompasses the Progmat Coin stablecoin platform. Notably, Progmat now counts among its stakeholders some of Japan’s major financial institutions, including the second and third largest banks, SMBC and Mizuho.The scope of this venture extends beyond the confines of Japanese users, potentially transforming Japan into Binance’s stablecoin issuance hub. The initiative has emerged against the backdrop of recent regulatory events in the United States, notably the New York State Department of Financial Services (NYDFS) instructing Paxos Trust to halt the issuance of the Binance USD (BUSD) stablecoin earlier this year. The timeline for the launch of Japanese Binance stablecoins is set for 2024, contingent upon Binance Japan obtaining an Electronic Settlement Methods Transaction Business Provider license.Japan has been making strides in its regulatory landscape to accommodate various types of stablecoins, including those issued by banks and trusts. Under this framework, stablecoins issued by trusts like Mitsubishi UFJ Trust enjoy some unique advantages, such as exemption from licensing requirements and the absence of Know Your Customer (KYC) protocols for stablecoin transfers. Furthermore, these stablecoins are backed by ring-fenced reserve assets, mirroring the approach taken by Paxos Trust.The underlying Progmat blockchain technology is rooted in the Corda enterprise blockchain. However, MUFG has been actively collaborating with DataChain and TOKI technology to facilitate stablecoin issuance on multiple public blockchains, allowing for cross-chain transfers. The initial plan encompasses blockchain platforms like Ethereum, followed by Cosmos, Polygon, Avalanche, and others. This development raises questions about the potential elevation of Binance’s BNB Chain in the broader blockchain ecosystem.Tatsuya Saito, Founder and CEO of Progmat, remarked on the collaboration, stating:“We believe that the new stablecoin from this collaboration will be a step forward in advancing the Web 3.0. Progmat is a neutral infrastructure that enables the issuance of various brands of stablecoins with the greatest flexibility of use and the least risk of de-pegging, it does not compete with players issuing their own stablecoins.”Saito also hinted at other stablecoin projects in the pipeline with Japanese financial institutions and partners, underscoring Binance’s dominant position in the cryptocurrency trading world.Expanding presence in JapanBinance Japan, which recently acquired an existing crypto exchange and rebranded it as Binance Japan, currently lists 34 tokens. In addressing the WebX conference in July, Binance Founder and CEO Changpeng Zhao (CZ) recognized the positive regulatory environment that exists in Japan relative to Web3.From Binance’s perspective, this latest collaboration represents a substantial win, especially after the loss of its own stablecoin. Binance has been promoting lesser-known stablecoins on its exchange by reducing transaction costs, a strategy with inherent risks. In contrast, the alliance with MUFG, a globally significant bank, adds credibility and a different level of assurance to stablecoins.

Bhutan Quietly Mining Bitcoin Since $5,000The tiny nation of Bhutan continues to be full of surprises recently where crypto is concerned, with the latest report suggesting that the kingdom has been mining bitcoin for a number of years already.© Pexels/Pema GyamtshoAccording to a recent report in The Bhutanese, a Bhutan-based publication led by investigative journalist, Tenzing Lamsing, the landlocked nation had been mining bitcoin over the course of a “few years” already, in an effort to diversify its sovereign portfolio.Long-term investment strategyUjjwal Deep Dahal, CEO of Druk Holding and Investments (DHI), told the publication that the venture was part of a long-term investment strategy. DHI is the commercial arm of the Royal Government of Bhutan. It was formed pursuant to a Royal Charter in 2007 with the mandate of making investments on behalf of Bhutan while optimizing usage of resources.The mining activity had centered on Bitcoin although there was a small provision for Ethereum-based mining when Ethereum was a mineable proof-of-work (PoW)-based blockchain network. It’s unclear of the precise timeline but the report outlines that DHI has engaged in the mining space over a number of years, and at a time in which the Bitcoin unit price was as low as $5,000.Exploiting cheap hydroNestled in the Himalayas, Bhutan has considerable hydroelectric resources. Bitcoin mining is ordinarily an expensive exercise but in scenarios where there are plentiful energy resources with a marginally cheaper cost of production than the average, it can be an attractive and profitable enterprise. Dahal outlined that these conditions enabled DHI to reinvest profits back into additional mining equipment.The precise time-frame of DHIs entry into Bitcoin mining is open to speculation. However, we do know that the Bitcoin unit price was last below $5,000 at the onset of the pandemic in March 2020. Prior to that, Bitcoin had risen above $5,000 in April 2019 following an acute bear market in 2018.Crypto lender entanglementsBhutan and DHI hit the crypto radar last month when it was revealed that the kingdom had made significant investments into and out of failed crypto lenders Celsius and BlockFi. Dahal has said that the royal charter-mandated firm had taken out loans with both crypto lenders and had fully repaid those loans. However, that may have been something that happened later than anticipated. The Bhutanese company had a $30 million loan from BlockFi. BlockFi liquidated the Bitcoin collateral associated with that loan in 2022 but it left a shortfall of $800,000. The failed lender subsequently sued DHI. As of an April 13 court filing, BlockFi submitted a voluntary dismissal of the lawsuit to the courts, presumably because the shortfall was subsequently paid by DHI.In the case of Celsius, DHI had withdrawn $65 million from the lending platform prior to it declaring bankruptcy. Consequently, the matter has been the subject of speculation relative to the potential for the Celsius bankruptcy estate to pursue DHI for a clawback of the withdrawn funds.

Japanese Startup Drives Asian Digital Payment Network InitiativeSoramitsu, a pioneering fintech developer from Japan that focuses on blockchain-based solutions, is spearheading an initiative aimed at constructing a seamless cross-border payment system for Asian countries.Photo by Conny Schneider on UnsplashCBDC project involvementAt the core of this emerging international network is Cambodia’s central bank digital currency (CBDC), Bakong, which has garnered increasing attention for its potential to revolutionize digital payments within the region.Soramitsu has played a pivotal role in facilitating the issuance of Asian CBDCs, supporting both Cambodia’s Bakong and Laos’ Digital Lao Kip. Notably, Bakong has already demonstrated its prowess by facilitating QR code-based digital transactions between Cambodia and neighboring nations such as Malaysia, Thailand, and Vietnam. As of the close of 2022, Bakong boasts an impressive user base of 8.5 million individuals and has facilitated approximately $15 billion in payments.Replicating Cambodian CBDC successTokyo-based news outlet Nikkei reported on Tuesday that the firm’s strategic focus is now on replicating the success of Bakong by enabling comparable cross-border payments between India, China, Laos, and potentially Japan. To this end, Soramitsu’s initial step involves establishing a dedicated Japanese exchange platform for stablecoins.The envisioned system would enable streamlined transactions between countries, converting payments denominated in one CBDC to a stablecoin pegged to the recipient’s currency.Low transaction feesA key advantage of this innovative framework lies in its remarkably low transaction fees. By circumventing conventional interbank networks and intermediary banks, stablecoins can be directly transferred with minimal overhead costs.Although the precise fee structure for the stablecoin exchange remains under consideration, Soramitsu envisions a nominal charge, likely in the range of tens of yen per transaction — a fraction of the cost associated with conventional cross-border transfers.While exchanging stablecoins issued on the same blockchain is straightforward, the challenge arises when dealing with stablecoins issued on disparate blockchains. Soramitsu is actively collaborating with Mitsubishi UFJ Trust and Banking, one of the world’s largest financial services groups, and other prominent partners in Japan to develop the intricate exchange infrastructure necessary to facilitate such cross-blockchain transactions.Japan’s payment landscape received a significant boost in June with the implementation of revisions to the payment law, enabling banks to issue stablecoins. In line with these regulatory changes, local startup JPYC and regional banks are poised to launch yen-denominated stablecoins, some of which are anticipated to debut by 2024.Soramitsu’s vision for constructing a robust cross-border payment network has culminated in the formation of a dedicated project team. Collaborating with Tokyo-based digital services firm Vivit and the Tama University Center for Rule-making Strategies, Soramitsu is also exploring partnerships with major e-commerce platforms to maximize the network’s reach and impact.The underlying motivation is to harness the potential of CBDCs and stablecoins to bridge the gap between Japanese small and medium-sized enterprises and individuals and businesses in Southeast Asia. Given the region’s high smartphone penetration and limited access to traditional banking services, this initiative could prove transformative, granting previously underserved populations greater financial inclusion.