Japan’s Megabanks Move to Replace Correspondent Banking With Shared Stablecoin

Three of Japan's largest financial institutions – Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group – are collaborating to build a shared stablecoin infrastructure. This initiative aims to modernize corporate cross-border payments and is targeted for a commercial rollout by March 2026. The project is being developed under the oversight of Japan’s Financial Services Agency and is legally structured under the country's Payment Services Act.

Technical Framework and Adoption

The stablecoin is built on the Progmat Coin blockchain platform, a tokenization network developed by fintech firm Progmat Inc., which has ties to MUFG. The stablecoin is legally classified as an “Electronic Payment Instrument.” Initially pegged to the Japanese yen, a dollar-denominated version is also planned. A key technical feature is its integration with SWIFT messaging, allowing corporate clients to initiate blockchain-based settlements using their existing banking infrastructure. Mitsubishi Corporation is already testing the stablecoin for internal cross-border transfers between its subsidiaries, aiming to reduce fees and settlement delays.

Market Ambitions and Future Outlook

The project seeks to enable 24/7 real-time settlement at a significantly lower cost compared to traditional systems. This positions the initiative as a competitor to established global stablecoins like Tether (USDT) and Circle’s USDC within Japan's regulated market. The three banks involved serve over 300,000 major corporate clients, providing a substantial potential user base. Analysts project that bank-backed stablecoins could reach $2.8 trillion in global circulation by 2028, indicating a significant market opportunity that Japan's megabanks are actively pursuing.