As Japanese financial authorities push to expand the yen-based digital asset market, three megabanks have advanced their joint stablecoin plans by establishing a council to develop the framework for issuing the token this fiscal year.
Megabanks Advance Joint Stablecoin PlansThe three largest Japanese banks, Mitsubishi UFJ Financial Group (MUFG) Bank, Sumitomo Mitsui Banking Corp., and Mizuho Bank, are preparing to launch their jointly issued stablecoin by the end of the 2026 fiscal year (FY2026).
The banks announced 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 token’s practical implementation.
“The Council will serve as a framework for examining the potential development of an issuance infrastructure related to the Subject Stablecoin, as well as the design of systems, schemes, and governance 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, aiming to launch live transactions of the joint stablecoin before March 31, 2027, when the current fiscal year ends. In addition, the council will also consider collaborations with financial institutions and other relevant stakeholders that may join the project in the future.
In November, the banks announced a pilot project under the Financial Services Agency’s (FSA) Payment Innovation Project. The pilot used the infrastructure of Tokyo-based fintech company Progmat and aimed to gather “practical knowledge” on the joint issuance of a stablecoin and advanced cross-border payments.
Japan’s Regulatory Push For Yen-Backed TokensIn 2022, Japanese authorities amended the Payment Services Act to establish a legal framework for stablecoins. Under the new regime, only licensed money transfer companies, trust companies, and banks are allowed to issue yen-denominated tokens.
Junichi Kanda, a lawmaker on the ruling party’s panel, affirmed that the LDP pushed the government to boost 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 stated.
The lawmaker also said that Japan could promote yen-based tokens and blockchain innovation next year, when the country hosts the Asian Development Bank’s annual meeting.
Meanwhile, the FSA recently expanded the Cabinet Office Ordinance to recognize certain trust-type stablecoins issued by foreign trust banks and similar entities as electronic payment instruments under the Payment Services Act.
