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Japan’s 3 Major Banks To Trial Stablecoin Payment System
In a Friday statement, Japan’s Financial Services Agency (FSA) announced the launch of the “Payment Innovation Project” as a response to progress in “the use of blockchain technology to enhance payments.” The regulator said the proof-of-concept (PoC) trial brings together Mizuho Bank, Sumitomo Mitsui Banking Corp., and MUFG Bank.
The project seeks to verify whether “regulatory and practical compliance” can be carried out “legally and appropriately” in accordance with existing financial regulations when megabanks jointly launch a stablecoin as an electronic payment instrument.
The experiment will start this month and is expected to run from November 2025 onward for the foreseeable future, the regulator stated. Results from the trial will later be published on the FSA’s website.
The stablecoin sector, dominated by dollar-pegged assets like Tether’s USDT and Circle’s USDC, has boomed over the last two years, crossing the $300 billion mark in market cap for the first time in October.
 
Stablecoins In Japan
The FSA’s announcement confirms a report from business newspaper Nikkei earlier this month. The alliance is considered a key step in modernizing corporate settlements and reducing transaction costs through a yen-based stablecoin built on Mitsubishi UFJ Financial Group’s stablecoin issuance platform Progmat.
The news comes as smaller companies are already issuing stablecoins and integrating them into their existing financial and technological frameworks. In late October, Tokyo-based startup JPYC unveiled a fully convertible yen stablecoin backed by domestic bank deposits and the Japanese deep government bond market.
Additionally, Japan’s market is attracting fresh entrants as the regulations are clarified. Ripple and SBI are targeting an early-2026 launch of the RLUSD stablecoin in Japan.
At the same time, Japan’s FSA is considering allowing banks to trade and hold cryptocurrencies, such as Bitcoin, for investment purposes.