Major Japanese Banks Back Stablecoin Project for Cross-Border Settlements

Project Pax aims to improve cross-border business payments through fiat-pegged stablecoins operating over a highly interoperable platform.

Blockchain companies Datachain and Progmat announced Project Pax, a stablecoin project that will bring efficient cross-border payments for business use cases. Japanese banking giants Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank are backing the project.

Project Pax has received support from the three largest banks in Japan because it aims to offer a much-needed solution for business settlements across borders. The G20 has iterated that current infrastructure needs upgrades to overcome issues with costs, speed, transparency, and access. Such issues persist despite the cross-border payments market hitting $182 trillion in 2022. Blockchain technology is an evident fit for making the infrastructure efficient.

Datachain’s announcement regarding the project read, “Project Pax’s cross-border transfer platform will utilize Swift’s existing API framework for banks to instruct Progmat to settle on blockchain networks, addressing AML/CFT, regulatory compliance, and operational setup challenges, while also considering the difficulties businesses face in using wallets.” While bringing easy access to blockchain technology, Project Pax will “aim to leverage stablecoins to enable fast, cost-effective, and 24/7 operational cross-border transfers.”

Project Pax Can Push Stablecoin Adoption in Underutilized Settings

The massive push the project is gaining from Japan’s premier banking institutions will take stablecoin usage for business use cases to the next level. Traditional businesses are yet to adopt stablecoins at significant scales. Project Pax’s pilot is set to begin “shortly” to expand stablecoin adoption. It aims to commercialize the infrastructure by 2025 and get other countries and institutions on board, offering unseen benefits with cross-border payments.

Project Pax is designed to act as a cross-chain layer, connecting numerous blockchains to allow interoperability with its stablecoin transfers. It will integrate the Inter Blockchain Communication (IBC) protocol and Datachain-developed Light Client Proxy (LCP) for this measure.