As Japanese financial authorities seek to expand the market for yen-based digital assets, three giant banks have advanced their joint stablecoin plans by establishing a board to develop a framework for token issuance this fiscal year.
Megabanks offers stablecoin shared plans
Japan’s three largest banks, Mitsubishi UFG Bank (MUFG), Sumitomo Mitsui Banking Corporation, and Mizuho Bank, are preparing to launch their own jointly issued stablecoin by the end of fiscal year 2026 (FY26).
On Wednesday statementThe giant banks revealed their plan to conduct business transactions during fiscal year 2026 using a stablecoin issued under a credit agreement, where the three banks will act as joint settlors and a trust bank or similar entity will act as trustee.
The banks announced that they have signed a Memorandum of Understanding (MoU) to form a joint voluntary council to review operational frameworks, governance and related issues to support the practical implementation of the token.
“The council will serve as a framework for studying the possible development of the issuance infrastructure related to the stable subject, as well as the design of systems, schemes and management structures,” the statement read.
The three banks will also accelerate their efforts to support the potential use of these tokens across a wide range of use cases, with the aim of launching live transactions for the shared stablecoin before March 31, 2027, when the current fiscal year ends. In addition, the Council will also consider collaboration with financial institutions and other relevant stakeholders who may join the project in the future.
It is worth noting that giant banks, serving more than 300,000 companies combined, are beginning to emerge exploration A shared stablecoin will launch in late 2025, with initial reports indicating plans to debut the token during fiscal 2025.
In November, the banks announced a pilot project under the Financial Services Agency’s Payment Innovation Project. The pilot used the infrastructure of Tokyo-based fintech company Progmat and aimed to gather “practical knowledge” about the joint issuance of a stablecoin and advanced cross-border payments.
Japan’s regulatory push for yen-backed tokens
In 2022, Japanese authorities amended the Payment Services Law to create a legal framework for stablecoins. Under the new system, only money transfer companies, credit companies and licensed banks are allowed to issue yen tokens.
Tokyo Financial Technology Corporation JPYC Fired The first yen-pegged token, JPYC, was launched in October, backed by yen reserves, including bank deposits and government bonds. Earlier this year, SBI Holdings partnered with Startale Group for JPYSC, a credit bank-backed yen stablecoin for institutional and cross-border use cases.
Last week, Japan’s Liberal Democratic Party (LDP) announced Named To create rules for cryptocurrency exchange-traded funds (ETFs) and promote yen-denominated stablecoins in the region in a new proposal for the government.
Junichi Kanda, a lawmaker on the ruling party committee, confirmed that the LDP has pushed the government to promote the use of yen stablecoins in the region. “We urged the government to take steps to promote yen stablecoins for settlement in Asia in the future,” he said.
The lawmaker also said that Japan could promote yen-based digital currencies and blockchain innovation next year, when the country hosts the annual meeting of the Asian Development Bank.
Meanwhile, the Financial Services Authority recently expanded the Cabinet Office Act to recognize certain trust-type stablecoins issued by foreign trust banks and similar entities as electronic payment instruments under the Payment Services Act.
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