#Japan #Tokyo #Progmat #Project Pax #Shoko Chukin Bank

Project Pax: Advancing Cross-Border Remittances with Stablecoins

In a significant stride towards transforming cross-border remittance systems, Progmat, Inc. and Datachain Co. have launched Phase 2 of their ambitious initiative, Project Pax. This phase centers on practical verification, marking a pivotal moment in the project as Shoko Chukin Bank becomes the first domestic entity to participate. The goal is to establish a robust framework using stablecoins for efficient cross-border transactions.

Background and Objectives

The development of Project Pax aims to tackle various challenges associated with cross-border transactions involving stablecoins (SC). By leveraging existing Swift assets and collaborating with financial institutions across nations, the initiative seeks to address issues related to anti-money laundering (AML) measures, compliance with regulations, and the multifaceted operations faced by enterprises using wallets. Since its inception, Progmat and Datachain have been fostering relationships with relevant organizations worldwide, enhancing collaborative efforts. Additionally, Mitsubishi UFJ Trust Bank is also evaluating the application of trust-type SC schemes to further validate the project's design.

During Phase 1, which concentrated on technical verification, prototypes were developed, leading to successful assessments of SC transfers via Swift, confirming the technical feasibility required for this innovation.

Now, as Project Pax transitions to Phase 2, further verification will be conducted, closely simulating real-world cross-border remittance practices alongside participating domestic and international banks. This hands-on testing will outline feasible solutions for commercial deployment.

Shoko Chukin Bank, with its extensive customer base predominantly comprising small and medium-sized enterprises (SMEs), plays a vital role in facilitating payment operations, particularly in trade transactions. Their participation aims to alleviate pain points in cross-border remittances, thus strengthening support for customers looking to expand overseas.

Collaboration Details and Expected Impact

In this phase, participating financial institutions will conduct practical assessments of the infrastructure developed under Project Pax. Specifically, Shoko Chukin Bank will evaluate the potentialities of their systems and operations in integration with the new framework, identifying essential actions and creating a roadmap for successful implementation.

Progmat and Datachain aim to leverage the outcomes of Phase 2 to create accessible commercial systems for both domestic and international financial entities, ultimately promoting a wider adoption of efficient cross-border payment systems powered by stablecoin technology. This advancement is essential in addressing the rising complexities in international finance.

Roles of the Participants in Phase 2

Commentary from Shoko Chukin Bank

Shoko Chukin Bank emphasizes that their involvement in Project Pax underlines their commitment to enhancing foreign exchange services, focusing particularly on cross-border remittances. This branch of financial operations is critical for supporting the global expansion of SMEs and trade dealings. The bank is also progressing on vital initiatives to align with the current urgent shift to ISO20022 standards in foreign exchange operations.

Incorporating the framework from Project Pax is expected to bolster customer service quality by addressing AML/CFT compliance while enhancing the overall usability for clients utilizing cross-border remittance services. Their active participation in this project illustrates a dedication to supporting the international trade endeavors of SMEs across Japan.

(Tsunekata Takahata, Executive Officer & International Division Head)

Future Plans

Verification activities are set to start promptly in April 2025, with a goal to achieve commercial viability within the year. As the process evolves, Project Pax will expand the participation of financial institutions and target regions, striving to establish a global standard for international payment networks utilizing stablecoins.

For further information on the involved organizations, check the following links:

• - Progmat, Inc.
• - Datachain Co.
• - Shoko Chukin Bank
• - Mitsubishi UFJ Trust Bank

Note: Datachain Co. is a subsidiary of Speee Co., listed on the Tokyo Standard Market (stock number: 4499). All names and services mentioned are trademarks or registered trademarks of their respective companies.