Key Takeaways:
MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank will jointly issue a yen-pegged stablecoin by the end of Japan's fiscal year in March 2027, establishing a formal council to develop operational frameworks under a trust agreement structure, the three megabanks said June 10.
"The three banks will act as joint settlors and a trust bank or similar institution will act as trustee," the banks said in a joint statement, adding that they are targeting live transactions in fiscal 2026 "with an eye toward the potential use of stablecoins across a wide range of use cases." The initiative operates under the Financial Services Agency's Payment Innovation Project, a program launched within the FinTech Proof-of-Concept Hub that has supported blockchain experiments since 2017.
Collectively, MUFG, SMBC and Mizuho oversee more than $7 trillion in assets, making this the largest institutional stablecoin initiative in Asia to date. The banks began exploring multi-bank co-issuance through a pilot in late 2025 that examined whether joint issuance could be carried out "legally and appropriately" under existing rules. The answer, confirmed by the formal council's establishment, was yes. Japan's ruling Liberal Democratic Party further endorsed the push on June 1, 2026, saying the state should promote yen-based stablecoins.
Japan's stablecoin regulatory framework crystallized in June 2023, when amendments to the Payment Services Act introduced a formal licensing regime for fiat-pegged stablecoins, classifying them as electronic payment instruments. The law restricts domestic issuance to licensed banks, trust companies and registered fund transfer service providers — a structural moat that positions the megabanks as natural issuers. Updated PSA 2026 amendments took full effect June 13, tightening travel-rule obligations for cross-border transactions, while a revised Cabinet Office Ordinance from June 1 allows foreign trust-type stablecoins to operate in Japan as electronic payment instruments if they clear FSA licensing, collateral management and audit standards. Reserve rules permit trust stablecoin issuers to invest up to 50 percent of reserves in short-term Japanese government bonds; the megabank stablecoin is expected to be fully reserved, backed by cash and JGBs held in trust.
The megabanks enter a yen stablecoin market that has accelerated since 2023's regulatory clarity. JPYC Inc. launched Japan's first legally recognized yen-denominated stablecoin, JPYC, in October 2025 with a market cap of around $18 million, according to CoinGecko. SBI Holdings and Startale Group followed in February 2026 with JPYSC, a trust bank-backed yen stablecoin for institutional and cross-border use. The Japan Blockchain Foundation said in May 2026 it would issue EJPY on Japan Open Chain and Ethereum. Dollar-pegged stablecoins have also entered the market: USDC became the first dollar stablecoin approved in Japan in March 2025, issued by SBI, while Ripple and SBI Holdings announced plans to launch RLUSD in the country.
Yen-pegged tokens currently represent less than $50 million of the $311 billion global stablecoin market, according to CoinGecko data, a share dominated overwhelmingly by Tether's USDT and Circle's USDC at a combined 84 percent. The megabanks' entry — backed by the full weight of Japan's three systemically important lenders and explicit FSA support — could shift that calculus, particularly for cross-border trade settlement and institutional payments between Japan and its Asian trading partners.
This article is for informational purposes only and does not constitute investment advice.
