Japan’s three largest banks are moving toward launching a jointly issued stablecoin, marking a coordinated push into digital payments.
MUFG Bank, Mizuho Bank, and Sumitomo Mitsui Banking Corporation said they plan to begin live transactions using the token during the fiscal year ending March 2027. The stablecoin is expected to be used for payments and cross-border transfers built on blockchain infrastructure.
In a joint statement, the banks said the token will be issued under a trust structure, with a trust bank or similar institution acting as trustee while the three lenders serve as joint settlors. They also signed a memorandum of understanding to form a voluntary council that will oversee governance, operations, and implementation planning.
Banks accelerate stablecoin development
The announcement builds on months of collaboration among Japan’s three largest banks. Last October, MUFG Bank, Mizuho Bank, and Sumitomo Mitsui Banking Corporation began working together to explore yen- and dollar-backed stablecoins as interest in tokenized finance grew globally.
The banks also took part in a demonstration project supported by Japan’s Financial Services Agency under its FinTech Proof-of-Concept Hub, which examined how stablecoins could be issued within Japan’s legal framework.
They said the newly formed council will study issuance infrastructure, governance, system design, and operational requirements. The group is expected to use the findings to develop a framework for large-scale stablecoin use.
Corporate payments take center stage
The project’s first major use case could come through a pilot involving Mitsubishi Corporation. The consortium is also exploring a common payment standard for corporate clients and cross-border transactions, according to people familiar with the plans.
The three banks together serve more than 300,000 corporate customers, a network that could support wide adoption of stablecoin-based payments across supply chains and commercial settlements.
The initiative is also aimed at keeping yen and dollar flows within Japan’s banking system. Businesses would be able to use regulated digital payment tools without relying solely on foreign stablecoin issuers.
Japan expands digital asset strategy
The stablecoin initiative comes amid broader regulatory changes in Japan’s digital asset sector. In November, the Financial Services Agency backed the project and said it would support testing and implementation under existing rules.
A few weeks ago, Japan updated its regulations to recognize certain foreign-issued stablecoins as electronic payment instruments. The changes, which took effect on June 1, 2026, set out how licensed operators can handle qualifying digital assets.
Lawmakers in the ruling Liberal Democratic Party have also called for the legalization of crypto exchange-traded funds and expanded use of yen-denominated stablecoins, reflecting growing interest in digital assets among policymakers.
The developments place the megabanks’ project within a wider shift in Japan’s financial system, as regulators gradually open the door to blockchain-based payment tools while keeping oversight within the banking sector.
Also Read: Kalshi Requires Employer Disclosure to Curb Insider Trading
