Japanese banks MUFG, SMBC and Mizuho participate in a pilot project using stablecoins and the Swift network for cross-border payments, reports an expert in the field of international financial law Konstantin Kryvopust.
In 2022, the cross-border transfer market will reach $182 trillion. However, the G20 identified four critical areas — cost, speed, access and transparency — that needed improvement. So Japanese banks are partnering with digital asset infrastructure startup Progmat and blockchain company Datachain to see if stablecoins can solve these problems.
Cross-border transfer platform Project Pax will use stablecoins and blockchain instead of correspondent banks. However, it will also use Swift’s existing banking API structure, as participants say that in the real economy, the role of Swift and banks remains critical due to considerations such as anti-money laundering and countering the financing of terrorism, regulatory compliance and operational frameworks.
The pilot project will start soon and plans to soon expand cooperation with more countries and financial institutions before a possible commercial launch next year.
