Japan's three largest banks, MUFG, SMBC and Mizuho, plan to jointly issue a yen stablecoin by March 2027. The announcement builds on a pilot program run by the financial regulator FSA.
A stablecoin is a digital token pegged to an underlying asset, in this case the Japanese yen, that lets companies make cross-border transfers without exchange-rate risk. Unlike volatile cryptocurrencies, its value is meant to hold steady at one-to-one with the yen. The three banks already run a joint pilot under the Payment Innovation Project, with the technical foundation provided by the Progmat platform developed by MUFG. In addition, Japan has had a regulatory framework for bank-backed stablecoins since June 2023. The combined balance sheet of the three banking groups stands at roughly 6.8 trillion USD. As the first pilot partner, Mitsubishi Corporation stands ready with more than 200 subsidiaries.
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Yen stablecoin on Progmat: how the three megabanks structure the issuance
First, the three banks will set up a joint coordination council that reviews the operational framework and prepares the issuance before the current fiscal year ends in March 2027. The technical foundation is the Progmat platform, which MUFG developed together with NTT Data and local banks. Furthermore, it supports several public blockchains, including Ethereum, Polygon, Avalanche and Cosmos. This multi-chain architecture allows the token to settle flexibly across different networks.
The project primarily targets B2B and intra-group payments. As the first pilot partner, Mitsubishi Corporation, a sister company of MUFG, tests international intra-group transfers across its more than 200 subsidiaries. The use case therefore focuses for now on large corporate structures rather than the retail market. For the groups involved, this promises faster settlement and lower exchange-rate costs in internal payments.
The FSA has accompanied the experimental phase under a fintech proof-of-concept program, where the project is listed as the eleventh initiative. This regulatory support gives the issuance official cover from the start. As a result, the consortium does not launch in a legal grey area but on an agreed path.
Regulatory tailwind: FSA framework and LDP parliamentary recommendation
The move did not emerge in a vacuum. Japan revised its Payment Services Act back in June 2023 and created a clear framework. Since then, only three categories of licensed institutions may issue digital-money stablecoins: banks, money transfer service providers and trust companies. JPYC Inc. began issuing yen-pegged stablecoins in October 2025 and received the FSA license as a money transfer service provider on 26 November 2025, the first company to do so. The company thus delivered Japan's first FSA-approved yen stablecoin. Later, on 1 June 2026, the regulator activated new rules for foreign stablecoins that open an approval path, provided the country of origin regulates them equivalently. Japan is therefore building out its rulebook step by step and in both directions.
At the same time, politics is pushing the pace. A working group of the ruling LDP party filed a formal proposal with Finance Minister Satsuki Katayama on 1 June 2026. It aims to promote yen stablecoins for settlements in Asia and to create a legal framework for crypto ETFs. Japan also plans to present these initiatives at the Asian Development Bank's annual meeting in May 2027. Consequently, the banks' corporate push interlocks with a geopolitical agenda.
"We have called on the government to take steps to promote yen stablecoins for settlements in Asia going forward." - Junichi Kanda, LDP member of parliament, blockchain technology working group
Yen stablecoin in the global market: less than 0.01% of USD capitalization
Despite the political tailwind, Japan starts from a narrow base. Yen-denominated stablecoins account for less than 0.01% of the market capitalization of USD-backed stablecoins, as BIS general manager Pablo Hernández de Cos calculated at a Bank of Japan seminar in April 2026. The yen is the fourth most-used currency in cross-border payments worldwide. Its digital counterpart, however, has barely gained traction.
Globally, US dollar stablecoins such as USDT and USDC dominate the market almost entirely. That the yen lags so far behind also has homegrown causes: cash and credit cards continue to shape Japan's payment market strongly. Digital payment methods have therefore caught on more slowly there than in other large economies. For the megabanks, intra-group B2B traffic is thus an obvious entry point that depends less on retail habits.
Bank of Japan Deputy Governor Ryozo Himino likewise argued for a holistic approach to designing the global monetary system, one that reaches beyond CBDCs and stablecoins. This signal suggests that the central bank thinks about the topic more broadly than a pure stablecoin push. Nevertheless, the banking move fits into a wider debate about central bank digital money.
Bank-backed stablecoins as a global trend
The Japanese push joins an international movement. JPMorgan operates the most prominent example of a bank-backed token with JPM Coin, and institutions in the EU and Singapore are testing similar instruments for the interbank and corporate space. What these projects share is a focus on the B2B segment rather than retail speculation. Japan is therefore neither a pioneer nor a clear laggard.
Strategically, Japan's initiative aims clearly at Asia, with the planned presentation at the ADB's 2027 annual meeting providing the frame. Together, the three megabanks serve more than 300,000 corporate clients and thus command a potentially broad adoption base. Notably, three competing megabanks are for the first time backing a shared issuance platform. Whether this reach lifts the yen stablecoin out of its niche, however, will only become clear after the launch in March 2027.
