Japan’s three largest financial institutions—MUFG Bank, Mizuho Bank, and Sumitomo Mitsui Banking Corporation—have announced the formation of a joint council to create a unified framework for a new stablecoin. The megabanks intend to launch the digital asset by March 2027, marking a significant step in the modernization of Japan’s core financial infrastructure.
This initiative responds to a national push to integrate blockchain-based payments into the Japanese banking system, aimed at lowering costs for corporate settlements and enabling round-the-clock transfers. The project operates under the Financial Services Agency’s Payment Innovation Project, according to a detailed licensing overview published earlier this year.
Operational Structure and Technical Foundation
The stablecoin will function under a formal trust agreement. In this setup, the three participating banks act as joint settlors, while a designated trust bank will serve as the trustee. This structure is designed to ensure that the token remains fully backed by fiat reserves, complying with the regulatory standards established by the amended Payment Services Act.
Technical development is expected to rely on the “Progmat” platform, a tokenization system originally developed by MUFG. The platform provides the necessary infrastructure for stablecoins to move across various public blockchain networks, ensuring interoperability between the banks and external corporate partners.
Competitive Landscape and Regulatory Shift
The banks are entering a sector that has seen increasing activity from domestic and international players. Startup JPYC introduced a yen-backed stablecoin in 2025, and SBI Holdings has established a partnership with Circle to distribute USDC within the local market. These initiatives gained momentum after pilot tests conducted in late 2025 confirmed that banks could meet the FSA’s rigorous compliance requirements for digital asset issuance.
The current legislative environment restricts fiat-backed stablecoin issuance primarily to licensed banks and trust companies. By leveraging their existing institutional scale, the three megabanks aim to provide a standardized payment instrument for large-scale corporate transactions, addressing inefficiencies in current cross-border and domestic settlement processes.