MUFG Bank, Sumitomo Mitsui Banking Corporation and Mizuho Bank will establish a council to examine operating rules, governance, issuance procedures and systems needed for the launch. The initiative brings together the banking arms of Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group, which collectively serve a vast corporate client base across Japan and overseas markets.
The planned issuance marks a significant step in Japan’s effort to modernise payments through blockchain-based settlement while keeping the activity within the regulated banking system. Stablecoins are digital tokens designed to maintain a fixed value against a fiat currency such as the yen or the dollar, allowing near-instant settlement and lower transaction friction compared with traditional correspondent banking routes.
The project is expected to begin with yen-denominated stablecoins, with the possibility of wider currency use if operational and regulatory conditions are met. The banks are examining a common standard so that corporate clients can transfer stablecoins across participating institutions without being locked into a single bank platform. That interoperability is central to the commercial case, as fragmented digital currencies would do little to improve Japan’s existing settlement infrastructure.
Japan’s Financial Services Agency has been supporting the experimental phase through its fintech framework, reflecting official interest in using blockchain to improve payment efficiency while preserving anti-money laundering controls, redemption rights and reserve discipline. The country’s legal framework already treats certain stablecoins as electronic payment instruments, a category that permits issuance by banks, trust banks and licensed fund transfer service providers under defined conditions.
The initiative follows an earlier proof-of-concept involving the same banking groups, with Progmat providing infrastructure support for stablecoin issuance and cross-border payment testing. Mitsubishi Corporation was identified as a major corporate user case in trials involving payments between domestic and overseas locations, offering a practical test of whether tokenised settlement can reduce delays and costs in multinational treasury operations.
The timing is notable because Japan has traditionally remained heavily reliant on cash, bank transfers and credit cards, even as policymakers and financial institutions have promoted cashless payments. Bank-backed stablecoins could appeal first to companies rather than retail users, particularly for treasury management, supplier settlement, inter-company remittances and securities-related transactions.
The move also follows the launch of JPYC, the first yen-pegged stablecoin fully convertible into yen, which began issuance in October 2025. JPYC is backed by domestic savings and government bonds, and its arrival demonstrated that yen-based stablecoins can operate under Japan’s regulatory structure. The megabank initiative, however, carries a different scale because of the banks’ balance sheets, client relationships and integration with mainstream payment systems.
Globally, stablecoins have shifted from a crypto trading tool toward a broader payments and settlement instrument. Dollar-pegged tokens still dominate the market, with Tether and USDC accounting for the overwhelming share of circulation. The total stablecoin market has expanded into the hundreds of billions of dollars, helped by clearer regulation in several jurisdictions and rising interest from banks, payment firms and asset managers.
Japan’s push comes as policymakers in Asia examine whether local-currency stablecoins can reduce reliance on dollar settlement and support faster regional trade payments. A ruling party panel has called for greater use of yen-based stablecoins in Asian settlement, aligning the banks’ plans with a wider policy debate over the international role of the yen.
Regulatory caution remains a central issue. Stablecoins can move money quickly across platforms and borders, but supervisors are concerned about reserve quality, redemption risk, cyber security, sanctions compliance and the possibility that funds could migrate outside conventional bank deposits. Japan’s model seeks to address those concerns by keeping issuance close to licensed institutions and subjecting intermediaries to registration and compliance rules.
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