Japan’s Top Banks Launch Stablecoin Pilot Backed by FSA Support

In Brief

• MUFG, Mizuho, and SMBC launch stablecoin pilot under FSA oversight starting November 2025.
• Project aims to streamline cross-border payments with yen-backed digital assets.
• Stablecoins to target corporate use with full reserve backing and legal compliance.

Japan’s three largest banks Mizuho, MUFG, and SMBC have launched a stablecoin pilot with support from the Financial Services Agency (FSA). The project aims to issue yen-backed stablecoins for payments under Japan’s revised Payment Services Act.

The FSA confirmed that the coins will be tested as electronic payment instruments for domestic and cross-border transactions. MUFG will use its Progmat platform to manage issuance, ensuring compliance with legal and technical standards.

Mitsubishi Corporation, Progmat Inc., and Mitsubishi UFJ Trust will support the banks as consortium partners. The pilot is scheduled to begin in November 2025 and will run without a set end date.

Japan’s Finance Ministry and the FSA plan to monitor the pilot to ensure proper reserve backing and operational transparency. The regulator will assess whether joint stablecoin issuance can operate under existing legal frameworks.

Stablecoin Use Targets Institutional Payments and Trade

The banks expect early adoption from exporters, trading firms, and financial institutions seeking faster and more efficient settlement tools. The stablecoin may reduce delays, improve treasury operations, and support large-value corporate transfers.

With regulatory backing and bank-issued credibility, the asset may compete directly with private stablecoins like JPYC. However, institutional trust and compliance could give the bank-led model a stronger position in the market.

The consortium is also evaluating a possible dollar-backed version to improve international trade settlements. Cross-border payments remain expensive and slow, but stablecoins could lower risks and increase processing speed.

This initiative is the first project under the FSA’s new Payment Innovation Project, which promotes blockchain-based financial infrastructure. The agency will publish test results and legal findings to guide future development in Japan’s digital economy.