The three largest banks in Japan said on Wednesday they will jointly issue a yen-backed stablecoin during the fiscal year ending March 2027, and a council they are forming will set the operating and governance rules before any token is issued. The commitment lifts Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group into a digital-currency race that, until now, was led by a Tokyo startup.
The banking arms of the three financial groups will set up the council to examine operational frameworks, they said in a joint statement. Japan’s Financial Services Agency has been supporting the project since a proof-of-concept in November 2025, calling it part of the country’s push to use blockchain to modernize payment systems where cash and credit cards still dominate.
Three Megabanks, One Council
MUFG Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank will act as joint settlors of the issuing trust, the lenders said. A trust bank will serve as trustee, and the project will lean on Progmat’s blockchain infrastructure, the same platform MUFG already uses for tokenized securities. The banks will examine issuance infrastructure, system design, governance, and operating processes, and they will also review Japanese laws and market conditions before live transactions begin.
The council may also let other financial institutions and related companies join the framework later. The statement did not disclose the token’s issue size, blockchain network, retail access terms, or a precise rollout date beyond the fiscal 2026 window. Reuters reported the announcement on Wednesday from Tokyo.
The three banks will accelerate their initiatives.
The joint statement was issued on Wednesday from Tokyo, framing the project as a coordinated push across the three banking groups rather than a token launch.
The Trust Structure Underneath
The architecture is the most concrete signal in the announcement. The three banks will issue the stablecoin through a trust agreement, with a trust bank or a similar institution acting as trustee, according to the joint statement. Mitsubishi UFJ Trust and Banking Corporation handled the planned trust structure in the November 2025 proof-of-concept. Progmat supplied the blockchain infrastructure, while the three banks developed the requirements and assessment standards.
| Issuer | Status | Type | Blockchain / structure |
|---|---|---|---|
| MUFG, SMBC, Mizuho (joint) | Live transactions in fiscal 2026 (FY ending March 2027) | Trust-type, joint settlors | Trustee: MUFJ Trust; blockchain: Progmat |
| JPYC Inc. | Live since October 2025 | First regulated yen stablecoin in Japan | Funds Transfer Service Provider; Avalanche, Ethereum, Polygon |
| SBI Holdings and Startale | In preparation | Institutional yen stablecoin | Not disclosed |
| Circle (USDC) | Live in Japan since March 26, 2026 | Dollar-pegged, foreign stablecoin | Brought in via SBI VC Trade’s EPISP license |
The pilot tested cross-border payments between Mitsubishi Corporation’s Japanese and overseas offices, and it reviewed legal compliance and user protection. Japan’s revised Payment Services Act, which took effect in June 2023, classifies stablecoins as “Electronic Payment Instruments” denominated in fiat currency and redeemable at face value. Under that framework, the banks can issue a trust-type stablecoin with reserves held in Japanese government bonds, US Treasury securities, or short-term deposits.
Research firm 4pillars reports the three megabanks are targeting ¥1 trillion in stablecoin issuance by 2028 on their shared platform, a figure that would set the scale of the buildout once the council settles its design. The 4pillars research also tracks Circle’s USDC, the SBI Holdings-led yen token, and the tokenized-deposit network DCJPY. SBI Holdings and Startale have prepared an institutional yen stablecoin of their own, the same research notes. A 2025 amendment to the Payment Services Act allowed trust-type issuers to invest up to 50% of backing assets in low-risk instruments, a change that made a megabank-issued token more economically workable. The trust structure and Progmat infrastructure for the joint yen stablecoin is laid out in more detail in a separate report, and Japan’s full stablecoin framework and 2028 megabank target sit inside a broader research map of regulated yen tokens.
JPYC’s First-Mover Edge Just Narrowed
For the better part of a year, the most prominent yen stablecoin in Japan has been JPYC, the token launched in October 2025 by Tokyo startup JPYC Inc. JPYC became the first regulated yen-pegged stablecoin in Japan, and the company has set an issuance target of 10 trillion yen within three years. The token runs on Avalanche, Ethereum, and Polygon, and is backed by reserves held in yen deposits and government bonds.
Now the same market is being entered by three of Japan’s largest banks. The megabanks collectively serve over 300,000 business clients that still rely on legacy clearing systems, and the council’s framework is built to handle corporate cross-border payments, a use case JPYC has only begun to explore. JPYC’s distribution runs through bank transfers and crypto exchanges licensed in Japan; the megabank project issues the token from a regulated trust that sits inside the existing banking system.
The competitive geometry is uneven. A startup can move faster on retail wallet features and exchange listings, but the megabanks can route every payment through the corporate accounts they already hold, a structural advantage in a country where most large companies keep their main accounts at one of the three. JPYC was the first to market, but a megabank trust inside the existing payment rails is a different kind of distribution. The same fight is now playing out in other markets, with banks and stablecoin wallets racing for control of digital cash, as the broader fight between banks and stablecoin wallets shows.
The FSA Has Been Building the Rails
The regulator has been in the background of the announcement for months. The Financial Services Agency supported the proof-of-concept in November 2025 and called it the first initiative under its Payment Innovation Project, a program the FSA launched on November 7, 2025, inside its long-running FinTech Demonstration Hub. The agency has framed the project as part of Japan’s effort to use blockchain technology to enhance payment systems, and the November 2025 pilot included compliance and user-protection reviews.
The legal foundation predates the pilot. Japan’s revised Payment Services Act took effect in June 2023, classifying stablecoins as Electronic Payment Instruments and restricting issuance to licensed banks, funds-transfer service providers, and trust companies. A 2025 amendment let trust-type issuers invest up to 50% of backing assets in low-risk instruments, a change that gave a megabank-issued token room to earn yield on its reserves. The council will report to a regulator that has already done most of the rule-making work, and the FSA’s November 2025 proof-of-concept announcement set the framework the new joint project now extends.
Why Megabanks Want a Yen Token in Asia
The political signal is in the timing. On June 1, 2026, a Liberal Democratic Party panel on promoting blockchain technology submitted a proposal to Finance Minister Satsuki Katayama calling for Japan to promote usage of yen-based stablecoins, including for settlement in Asia. The proposal framed crypto-ETFs and yen tokens as ways for Japan to remain competitive as the U.S. and Hong Kong open similar markets, and it followed a cabinet-approved draft amendment in April to classify crypto as a financial product rather than a payment tool.
The dollar-peg context is the larger pressure. $315 billion is the size of the global stablecoin market as of June 1, 2026, and the field is dominated by tokens pegged to the dollar. That has prompted policymakers outside the U.S. to warn that dollar dominance could circumvent their own banking and payments systems, a concern the LDP proposal echoed when it urged Japan to push yen tokens for regional settlement. The LDP panel’s June 1 proposal on yen stablecoins and crypto ETFs sets out the policy case for a yen-pegged settlement layer in Asia.
- $315 billion – global stablecoin market cap as of June 1, 2026
- 10 trillion yen – JPYC three-year issuance target
- ¥1 trillion – 4pillars-reported megabank stablecoin target by 2028
- 300,000 – corporate clients served collectively by the three megabanks
- March 2027 – end of fiscal year for the first live megabank stablecoin transactions
What the Council Has to Decide
The joint statement left the most consequential details unresolved. The council has to set the issuance size, the choice of blockchain network, the reserve composition, the rules for inter-bank settlement, and the conditions under which outside institutions can join. It also has to decide whether the first wave of live transactions will be limited to corporate payments or open to retail users from day one.
The trust agreement sets the legal ceiling on what the council can change. Reserves must be held in qualifying low-risk assets under the Payment Services Act, and the token must be redeemable at face value, the kind of constraints that give corporates predictable settlement but limit the product’s flexibility.
- Token issuance size and reserve composition
- Choice of blockchain network and Progmat configuration
- Whether retail users are eligible from launch or only corporate clients
- Conditions for additional financial institutions to join the framework
- Inter-bank settlement rules and reconciliation standards
- Cross-border use cases and the linkage to the LDP’s Asia settlement proposal
Frequently Asked Questions
What is a yen stablecoin?
A yen stablecoin is a digital token pegged 1:1 to the Japanese yen, redeemable at face value, and backed by reserves held in qualifying assets. Under Japan’s revised Payment Services Act, which took effect in June 2023, such tokens are regulated as Electronic Payment Instruments and can be issued only by licensed banks, trust companies, or registered funds-transfer service providers.
How is the megabank stablecoin different from JPYC?
JPYC Inc. issued the first regulated yen stablecoin in October 2025, and the token runs on multiple public blockchains including Avalanche, Ethereum, and Polygon. The joint MUFG-SMBC-Mizuho project will be a trust-type token built on the Progmat infrastructure and issued from inside the three banks’ regulated balance sheets, a structure aimed at corporate and cross-border payments rather than retail wallets.
When will the megabank stablecoin launch?
The three banks said they will start live transactions during the fiscal year ending March 2027, the Japanese fiscal year that runs through next spring. The council’s framework design and governance rules have to be settled first, and the banks have not named a more precise date.
Can individuals use the megabank stablecoin, or is it corporate-only?
The joint statement did not specify. The initial framework is being built around corporate cross-border payments and interbank settlement, and the council will decide whether retail access is part of the first phase or added later.
What role is the FSA playing?
The Financial Services Agency supported the November 2025 proof-of-concept and runs the Payment Innovation Project that the joint project sits within. The agency has been framing the build as part of Japan’s effort to use blockchain to modernize payment systems, and the council’s design will have to fit the legal framework the FSA already set in the 2023 Payment Services Act.
