Datachain, a blockchain startup focused on interoperability, announced the launch of Project Pax, a stablecoin platform to facilitate cross-border business settlements.
According to the Sept. 5 official post, Japan’s three largest banks, Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank, are backing the initiative.
The project is a collaboration between blockchain companies like Datachain, Progmat, and TOKI, with expectations of global participation from financial institutions.
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Cross-border inefficiency
The $182 trillion global cross-border payments market faces substantial inefficiencies in speed, accessibility, and cost despite remaining a primary focus for financial institutions.
According to the post, the G20 identified these inefficiencies alongside the need for “significant improvements” to transparency.
“In this market, Progmat and Datachain aim to leverage stablecoins to enable fast, cost-effective, and 24/7 operational cross-border transfers.”
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Stablecoins as a tool for enterprise
Project Pax aims to address the inefficiencies highlighted by the G20 by integrating stablecoins into the international business settlement process
The initiative seeks to change the limited adoption of fiat-pegged cryptocurrencies for traditional business operations by using stablecoins as an enterprise payment tool.
According to the post, the stablecoin platform will “utilize Swift’s existing API framework for banks to instruct Progmat to settle on blockchain.”
“[This addresses] AML/CFT, regulatory compliance, and operational setup challenges, while also considering the difficulties businesses face in using wallets. [Enabling] financial institutions to avoid operational redundancy with fiat currency transfers and minimize investment costs.”
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Bank of Japan rate hike topples Bitcoin
As of Sept. 3, Bitcoin (BTC) price had fallen 6.5% with no sign of slowing. Traders attributed the downtrend to statements issued by the Bank of Japan (BoJ), rekindling fears of recession.
In a document issued to a government panel, BoJ Governor Kazuo Ueda stated the central bank’s policy decision in July, indicating that the regulator would continue to hike interest rates.
The statement prompted traders with a stark reminder of late July, when the benchmark rise saw an unwinding of Japanese Yen carry trades and the destabilization of risk assets, like BTC.
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