The Financial Services Agency of Japan has officially supported a joint project of a stablecoin by the three megabanks in the country. The merger brings together Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group under a single coordinating pilot. It intends to digitize payments in this country and solidify Japan on regulated blockchain based finance and innovations.
🚨JAPAN TO LAUNCH A STABLECOIN!
🇯🇵Japan’s Financial Services Agency backs a pilot with the nation’s top banks, Mizuho, MUFG, and SMBC, to test bank-issued stablecoins.
— Coin Bureau (@coinbureau) November 7, 2025
The Joint Stablecoin Connects the Yen-Pegged Coin and Megabanks
The three banks under the pilot will jointly issue a yen-pegged coin classified as an electronic payment instrument. Furthermore, the joint stablecoin initiative targets a Japanese yen-pegged coin that companies use for domestic transactions and settlements across sectors. In addition, it aims to enable quicker movement between bank groups while maintaining bank-grade supervision, compliance and transparent reporting standards.
Mitsubishi Corporation is an example of a commercial partner and helps in use cases in daily business transactions and supply chains. Progmat offers the infrastructure that facilitates issuance and transfer of tokens to ensure that banks are able to transfer tokens across their networks in an efficient and secure manner. Mitsubishi UFJ trust and banking corporation handles trust activities to protect the underlying fiat reserves of the users.
The pilot will commence in November 2025 and will operate for the foreseeable future under close regulation in Japan. Furthermore, the banks will use common technical, operational and legal standards to test interoperability between their systems. As a result, they will gauge impacts on user convenience, company productivity and overall payment efficiency across the broader Japanese economy.
Dollar Coin Broadens Payment Innovation Through Joint Stable Coin Project
The banks plan to extend the framework to a potential dollar-pegged stablecoin for cross-border use. Moreover, any expansion will build on experience from the original yen design and the broader stablecoin project model.
It will respond to rising demand for digital settlement solutions linked to major global currencies and markets.
The Payment Services Act of Japan already regulates stablecoins as electronic payment instruments and sets strict backing rules. Moreover, the regulator now uses the joint stablecoin project to check how various groups can jointly issue such instruments responsibly. After the pilot stage, the authorities will therefore publish findings on legal treatment, operational risks, and governance.
The project also stands as the first initiative in the FSA FinTech hub under the new Payment Innovation Plan. Through this pilot, Japan consequently signals its drive to modernize payment rails and maintain regulatory authority over the joint stablecoin project.