This project, called “Project Pax”, stands out as an initiative developed by Japan’s three largest financial institutions. By encouraging the use of stablecoins in international transfers, the project aims to reduce banks’ operational costs and ensure that transactions can be made 24/7.

In the statement made on September 5, 2024, Datachain announced that Project Pax will use SWIFT’s API. SWIFT API will be used to make global remittance processes more efficient, which is seen as an important step for banks to reduce transaction costs and shorten transaction times.

The aim of the project is to reduce costs in international transfers and ensure faster transactions by using stablecoins.

In the project, using the SWIFT API framework, banks will direct Progmat to complete transactions on blockchain networks. This approach aims to address anti-financial crime (AML/CFT), regulatory compliance and operational challenges. Additionally, the difficulties faced by businesses regarding the use of wallets are also taken into account.

Project Pax will enable transfers between different blockchains using Inter-Blockchain Communication (IBC) protocols. This stands out as a technology that facilitates inter-blockchain communication and transaction transitions.

Datachain stated that the ultimate goal of the project is to enable faster and more cost-effective international transfers without undue attention to the existence of stablecoins or blockchain technology. This approach can be a great advantage, especially for large-scale businesses.

Progmat, a MUFG-backed initiative, facilitates the issuance of compatible stablecoins on blockchains such as Ethereum and Polygon. Datachain, on the other hand, enables transfers between different blockchain networks by offering cross-chain transfer capabilities. The partnership of these two companies is critical to the success of Project Pax.

Project Pax is defined as a project that aims to be fully commercialized by 2025, prioritizing scalability. However, specific timelines for the project have yet to be announced.

The project is seen as an important step in the integration of stablecoins and blockchain technology in Japan’s financial sector. It aims to make fundamental changes to Japan’s financial markets and transform the global financial system.

Using the SWIFT API will enable faster and more efficient communication between banks and also increase the security of cross-border transfers. This will enable international transfers to be carried out more efficiently and cost effectively.

This development could serve as a model for other countries and financial institutions. The successful implementation of the project could encourage wider adoption of stablecoins and blockchain technology around the world.

It is considered an important innovation, especially in terms of large-scale financial transactions and international trade. The innovations brought by Project Pax can play an important role in the future of the global financial system and inspire other countries to implement similar projects.