Japan's three megabanks target joint yen stablecoin by March 2027

MUFG Bank, Sumitomo Mitsui Banking Corporation and Mizuho Bank plan to start live transactions with a jointly issued stablecoin during fiscal year 2026. Japan’s fiscal year ends in March 2027. The banks signed a memorandum to create a voluntary council that will prepare the operating and governance framework.

The project follows a regulatory pilot supported by Japan’s Financial Services Agency. The three banks will issue the stablecoin through a trust agreement. They act as joint settlors, while a trust bank or a similar institution serves as trustee. The structure aims to let the banks share one issuance framework instead of developing separate tokens.

The official statement did not provide the token’s issue size, blockchain network, retail access terms or precise rollout date.

“The three banks will accelerate their initiatives,” the joint statement said.

In addition, the council will examine issuance infrastructure, system design, governance and operating processes. It will also review Japanese laws and market conditions before live transactions begin. MUFG, SMBC and Mizuho will establish the council first. The group may later work with other financial institutions and related companies that want to join the stablecoin framework.

The banks aim to support several payment uses rather than one limited test. They have not named the first commercial users or confirmed whether initial transactions will focus only on corporate payments.

The FSA Pilot That Preceded It

The FSA supported the proof-of-concept in November 2025. That pilot examined joint stablecoin issuance and cross-border payments involving Mitsubishi Corporation’s Japanese and overseas offices. Mitsubishi UFJ Trust and Banking Corporation handled the planned trust-based issuance structure. Progmat supplied the blockchain infrastructure. The three banks developed requirements and assessment standards.

The pilot also reviewed legal compliance and user protection. Japan’s Payment Services Act allows stablecoins to operate as regulated electronic payment instruments when issuers meet the required structure and reserve rules.

Why a Joint Token Matters

A single stablecoin shared by Japan’s three megabanks changes the settlement landscape for corporate clients. Each bank currently manages its own payment rails. A unified yen token could lower transaction costs and speed cross-border transfers. Mitsubishi Corporation already tested the concept during the pilot, using real trade flows.

For MUFG, the project sits within a broader digital asset push. The bank’s Alpha Score sits at 57/100, with a Moderate label, according to AlphaScala’s proprietary risk model. That score reflects an institution with stable earnings but rising exposure to fintech and regulatory shifts. A joint stablecoin could improve its fee income profile or divert capital to compliance infrastructure – the outcome depends on adoption speed.

For the market, a joint yen stablecoin adds a regulated alternative to existing tokens. JPYC launched a yen-backed stablecoin in October 2025. SBI Holdings and Startale have also prepared an institutional yen stablecoin. The three-bank project enters a field that already has two credible competitors.

Competitive Dynamics and Adoption Risk

The joint project’s advantage is its settlement trust. MUFG, SMBC and Mizuho hold the bulk of Japan’s corporate banking relationships. If the token becomes the default payment method for these clients, it could displace existing digital yen experiments. The risk is that each bank’s internal priorities diverge. The joint statement did not assign a lead bank or a budget for the initiative.

Japan’s ruling Liberal Democratic Party has called for broader use of yen stablecoins, tokenized deposits and round-the-clock settlement. The plan also supports clearer rules for tax payments, wages and corporate uses. Political backing reduces regulatory uncertainty but does not guarantee bank coordination.

Timeline and Next Markers

Fiscal year 2026 means a launch window between April 2026 and March 2027. The council must first finalize the infrastructure design and governance rules. Key markers:

• Selection of the blockchain network (Progmat is the front-runner from the pilot)
• Public naming of the first commercial user or pilot transaction
• Completion of the trust agreement structure with a trustee bank
• Regulatory approval from the FSA under the Payment Services Act

Any delay in the council’s formation or a shift in FSA stablecoin policy would push the target into fiscal 2027 or later.

What would confirm the project is real: a public test transaction between two of the banks, a named corporate client, or a commitment to a specific token standard. What would weaken it: a competing stablecoin capturing the same client base, or a bank deciding to issue its own token instead.

The three-bank project could add a shared settlement route for major corporate clients. Its progress will depend on the council’s final design, regulatory review and connections with existing payment systems.