Japan’s three biggest banks — MUFG Bank, Sumitomo Mitsui Banking Corporation (SMBC) and Mizuho Bank — have announced plans to jointly issue a yen stablecoin and aim to begin live transactions in fiscal 2026 (by March 2027). The move could create a shared settlement option for major corporate clients and marks a major coordinated push by traditional banks into tokenized yen payments.
Key points
- The banks signed a memorandum to form a voluntary council that will design the operating and governance framework for the joint stablecoin project. The council will also review Japanese laws and market conditions before live transactions begin.
- Issuance will use a trust structure: the three banks will act as joint settlors, while a trust bank (or equivalent) will serve as trustee. This lets them adopt one shared issuance framework rather than building separate tokens.
- Many technical and commercial details remain undecided and unannounced: token issuance size, blockchain network, retail access rules and the exact rollout timetable were not disclosed.
- The council will examine issuance infrastructure, system design, governance, operating processes and compliance. The group will initially be formed by the three banks and could later invite other financial institutions and related firms to join.
Regulatory and pilot background
- The project follows a Financial Services Agency (FSA)-backed proof-of-concept completed in November 2025 that tested joint stablecoin issuance and cross-border payments involving Mitsubishi Corporation’s Japan and overseas offices.
- In that pilot, Mitsubishi UFJ Trust and Banking Corporation handled the trust-based issuance design and Progmat supplied blockchain infrastructure; the three banks set requirements and assessment standards. The pilot also reviewed legal compliance and user protection.
- Under Japan’s Payment Services Act, stablecoins can operate as regulated electronic payment instruments if issuers comply with required structures and reserve rules.
Ecosystem context and next steps
- The banks’ initiative joins an increasingly crowded field of regulated yen token efforts. JPYC launched a yen-backed stablecoin in October 2025, and institutional yen-token projects from SBI Holdings and Startale are also in development.
- Japan’s ruling Liberal Democratic Party has pushed for broader use of yen stablecoins, tokenized deposits and 24/7 settlement, as well as clearer rules for tax payments, wages and corporate uses — a policy backdrop that supports projects like this.
- The three banks say they intend the stablecoin to support multiple payment uses rather than a one-off test, but they have not named initial commercial users or confirmed whether early transactions will be limited to corporate payments.
Why it matters
A jointly issued stablecoin from Japan’s three megabanks could streamline settlement for large corporate clients and accelerate mainstream adoption of tokenized yen payments — but progress hinges on the council’s final design, regulatory review, and integration with existing payment rails. Expect regulators and market participants to watch the council’s output closely as the project moves toward live transactions in FY2026.
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