Key Takeaways
- Japan’s top three bank, MUFG, SMBC and Mizuho, are preparing to issue a yen-pegged stablecoin by the end of the fiscal year, aiming to streamline corporate settlements and reduce transaction costs.
- The stablecoin will operate on MUFG’s Progmat platform and be supported by a unified legal and technical framework, allowing interoperability across more than 300,000 corporate clients.
- Mitsubishi Corporation will pilot the token for internal use, applying it to dividend payments, acquisitions and customer transactions across its global network of subsidiaries.
- The initiative marks the latest step in Japan’s gradual digital finance evolution, following earlier moves such as JPYC’s licensed yen stablecoin and Japan Post Bank’s planned DCJPY launch by 2026.
- Bank-led stablecoin projects vary by region, reflecting how different regulatory models shape the pace and design of digital currency adoption.
Three of Japan’s biggest banks are exploring a stablecoin project that could quietly redefine the country’s monetary system, starting within the corporate sector.
According to a report by Nikkei, Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Bank intend to issue a yen-denominated stablecoin by the end of the current fiscal year.
The digital token would be built on MUFG’s Progmat platform, a blockchain-based infrastructure designed to support secure and efficient digital asset transfers. Its primary use case will be business-focused, particularly for firms aiming to simplify inter-company payments and cut down on settlement fees.
The three banks are said to be coordinating on a shared technical and legal standard that would allow the stablecoin to work seamlessly across different systems and organizations. By agreeing on a unified framework, they hope to enable wide adoption among their collective base of more than 300,000 corporate clients.
Mitsubishi Corporation is expected to be the first to trial the token. The company, which oversees more than 240 subsidiaries globally, plans to apply it in routine internal tasks such as paying dividends, managing acquisition-related funds, and handling customer transactions.
While the initial rollout will focus on a yen pegged version, discussions are underway about expanding the system to include stablecoins tied to other major currencies at a later stage. If successful, the initiative could lead to Japan’s first bank backed digital payment infrastructure under a shared national framework.
Japan’s Evolving Path in Digital Assets
Japan’s relationship with cryptocurrency began a decade ago in the shadow of one of the industry’s earliest crises.
In 2014, the collapse of Tokyo-based exchange Mt. Gox exposed deep flaws in security and oversight, prompting Japan to take a regulatory lead where others hesitated.
By 2017, the government had passed the Virtual Currency Act, formally recognizing digital assets and requiring exchanges to register with the Financial Services Agency. The move positioned Japan as one of the first major economies to give cryptocurrencies legal status under a clear supervisory framework.
In the years that followed, regulators refined the rules through amendments to the Payment Services Act and the Financial Instruments and Exchange Act.
These changes tightened anti-money laundering requirements, strengthened custody standards and clarified the classification of digital assets.
Furthermore, the 2018 Coincheck hack, in which more than half a billion dollars’ worth of tokens were stolen, reinforced Japan’s cautious approach and pushed authorities to demand higher compliance from licensed operators.
By 2023, Japan had introduced one of the most comprehensive stablecoin regimes in the world.
The framework set out strict conditions for issuance, requiring that any yen-pegged coin be backed by bank deposits or government bonds and managed by licensed institutions.
Despite the clear rules, adoption remained modest as issuers and banks tested business models that could operate within Japan’s conservative financial structure.
At the same time, Japan’s payments landscape was changing. The share of cashless transactions rose to nearly 43% by 2024, exceeding government targets and reflecting a steady shift toward digital settlement.
The Bank of Japan began exploring a digital yen, conducting pilot programs and consulting with private institutions to design a central bank digital currency that could integrate with existing payment networks.
Private-sector initiatives have also gained traction. The startup JPYC secured regulatory approval to issue a yen-pegged stablecoin in 2025, aiming to make it fully convertible to yen and backed by domestic savings and government bonds.
Looking further ahead, Japan Post Bank plans to introduce a digital yen known as DCJPY by the end of fiscal 2026. The initiative will allow depositors to convert traditional yen into a tokenized form for instant digital transactions, particularly in securities and other blockchain-based financial assets.
Together, these efforts reflect Japan’s careful progression toward digital finance, balancing technological innovation with regulatory discipline.
Different Countries, Different Approaches and Results
Banks in several major economies are advancing their own stablecoin projects as part of a broader shift toward tokenized finance. Each region has approached the idea differently, reflecting distinct regulatory and market priorities.
In the United States, JPMorgan Chase has led the way with its JPM Coin, launched in 2020 for institutional clients.
The token allows large corporations to move funds instantly between accounts within the bank’s network. It has already processed billions of dollars in daily transactions, proving that a privately issued, bank-backed digital token can function at scale within a regulated financial environment.
In Europe, the most visible initiative has come from Societe Generale through its digital asset arm, SG-Forge.
The French bank introduced EUR CoinVertible, a euro-denominated stablecoin issued on public blockchains and backed by cash reserves.
It is designed for institutional use and has been approved under France’s digital asset regulations, positioning it as one of Europe’s first fully compliant bank-issued stablecoins.
In China, several state-linked banks have been directly involved in supporting the Digital Yuan (e-CNY), the central bank’s official digital currency.
The Industrial and Commercial Bank of China (ICBC) and other major lenders have built wallets and payment systems for its rollout.
Although not a private stablecoin, these initiatives represent China’s most advanced application of tokenized money within a state-led framework.
Together, these projects show that stablecoins issued by regulated banks can operate safely and efficiently when integrated within existing financial systems.
Read More: BlackRock Restructures Money Market Fund for Stablecoin Use; Here’s What Changed
