Progmat Starts "Project Pax" Phase 2, The Shoko Chukin Bank Participates

Progmat has commenced Phase 2 practical verification for "Project Pax," aimed at building a cross-border remittance infrastructure using stablecoins. In addition, The Shoko Chukin Bank has become the first domestic bank to participate in this project.

1. Background and Purpose

Project Pax, announced in September 2024, aims to develop a cross-border stablecoin remittance infrastructure that resolves various challenges such as AML/CFT compliance, regulatory requirements, integration with existing operations, and corporate wallet usage by leveraging Swift's existing assets and collaborating with financial institutions in various countries. The project is being promoted by Progmat and Datachain, and since its inception, has been advancing partnerships with relevant organizations in various countries. Also, Mitsubishi UFJ Trust and Banking Corporation is conducting verification of the application of trust-type stablecoin schemes.

In Phase 1 (Technical Verification), a prototype was developed to verify the technical feasibility of SC transfers via Swift through system integration between Swift, Progmat, and Datachain.

In Phase 2 (Practical Verification), testing closer to actual cross-border remittance operations will be conducted, with domestic and foreign banks acting as sending and receiving banks, identifying issues that need to be addressed for commercialization.

Shoko Chukin Bank has a broad customer base centered on small and medium-sized enterprises nationwide and is one of the major financial institutions handling numerous payment operations, including inbound and outbound remittances related to trade transactions.

To resolve the pain points in cross-border remittances and strengthen support for customers' international expansion, Shoko Chukin has decided to participate in this project. It is the first bank to join Phase 2 of this project.

2. Specific Collaboration Details and Expected Effects

In Phase 2, practical verification for financial institutions implementing the infrastructure being built by Project Pax will be conducted. Specifically, as one of the domestic banks, the feasibility from a system and operational perspective at Shoko Chukin Bank will be verified, implementation issues identified, and an action roadmap developed.

Based on the results of Phase 2, Progmat and Datachain will develop a commercial system with low implementation barriers for domestic and international financial institutions, aiming to advance cross-border remittances by encouraging wider participation of financial institutions.

3. Future Plans

Verification will begin promptly from April 2025, with the aim of commercialization within 2025.

In the commercialization process, Progmat and Datachain will expand participating financial institutions and target regions sequentially, working to establish a global standard for international payment networks using stablecoins.