Japanese Banks Adopt IBC for Stablecoin Cross-Chain Transfers

Baar, Switzerland — TOKI, a leading provider of IBC-enabled cross-chain infrastructure, has made history by facilitating the first-ever cross-chain transfer of an ERC20-compatible stablecoin backed by multiple Japanese banks from Ethereum (Sepolia) to BNB Chain testnets using IBC.

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What is IBC?

IBC, or Inter-Blockchain Communication protocol, serves as the backbone of blockchain interoperability, enabling secure and permissionless cross-chain interactions among over 110 blockchain networks. With a monthly asset transfer volume of $2.7 billion, IBC has emerged as the go-to solution for seamless interoperability in the enterprise space, backed by the Interchain Foundation’s commitment to its development.

TOKI, equipped with IBC-enabled cross-chain infrastructure, spearheaded this milestone achievement. Working in tandem with Progmat, an issuance and management platform for RWAs and stablecoins, TOKI developed the cross-chain infrastructure needed to bridge Ethereum, BNB Chain, and other major blockchains. Progmat, backed by Japan’s leading financial institutions such as MUFG, SMBC, Mizuho, and JPX, aims to issue regulated stablecoins compliant with Japanese regulations.

This breakthrough not only expands IBC to non-Cosmos blockchains but also introduces a novel security model combining SGX, MPC, and ZKP technologies. By leveraging this architecture, TOKI ensures secure and efficient cross-chain transfers while maintaining low gas costs, paving the way for widespread adoption of blockchain interoperability solutions.
Progmat’s stablecoins, pegged to currencies like USD and JPY, are backed by fiat currency assets deposited in a trust bank, guaranteeing the safety of collateral assets.
Through a lock-and-mint mechanism compliant with ICS-20, the IBC token transfer module, TOKI facilitates the seamless transfer of stablecoins across multiple blockchains. The burn-and-mint mechanism, akin to Circle’s CCTP for USDC, further streamlines cross-chain native token swaps through IBC.

What’s next?

Progmat’s stablecoins are compliant with Japanese regulation. They will be pegged to currencies such as USD and JPY. One of the key features of Progmat is that the fiat currency assets serving as collateral are 100% deposited in a trust bank, unlike other stablecoins, ensuring the safety of the collateral assets even if the stablecoin issuer fails.

Stablecoins will be issued on Progmat’s stablecoin platform in the second half of 2024. In line with the launch of these stablecoins, TOKI will implement a burn-and-mint mechanism to facilitate the cross-chain native token swap through IBC. Like Circle’s CCTP does for USDC, but open, and on IBC.

For more information on TOKI’s security model and upcoming initiatives, refer to their blog.

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About TOKI

TOKI is a pioneer in IBC-enabled cross-chain infrastructure, dedicated to fostering seamless interoperability among blockchain networks. With a focus on security, efficiency, and accessibility, TOKI is driving innovation in the blockchain ecosystem, empowering developers and users worldwide. To learn more, visit TOKI’s website.

About Progmat

Progmat is an issuance and management platform for RWAs and stablecoins, backed by Japan’s largest financial institutions. Through its partnership with TOKI, Progmat aims to revolutionize stablecoin issuance and cross-chain interoperability, paving the way for the widespread adoption of blockchain-based financial solutions.

About Interchain Foundation

Interchain Foundation stewards and advances the interchain ecosystem, driving innovation and collaboration across blockchain networks. With a commitment to open-source development and community engagement, Interchain Foundation plays a pivotal role in shaping the future of blockchain interoperability.