Highlights

Japan’s three largest banks—MUFG Bank, Mizuho Bank, and Sumitomo Mitsui Banking Corporation—have formed a council to create operational frameworks for a jointly issued yen stablecoin, targeting a launch by March 2027. The token will be issued under a trust agreement with the banks acting as joint settlors and a trust bank or similar institution serving as trustee. Regulatory clarity introduced in 2023 has fueled multiple institutional stablecoin projects in Japan, encouraging collaboration and experimentation under government-backed innovation programs.

Sentiment Analysis

• The overall sentiment of this development is broadly positive. It signals major incumbent financial institutions embracing blockchain-based payment tools while aiming to ensure legal and operational compliance. The initiative reflects cautious optimism: banks are moving deliberately, running pilots and working within regulatory frameworks rather than pursuing rapid, unregulated rollouts. The project is positioned as pragmatic and institutional — focused on trust structures and broad utility rather than speculative use.





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Article Text

Japan’s top three commercial banks—MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corporation—have taken a coordinated step toward issuing a jointly backed yen stablecoin, aiming for a launch by the end of the 2026 fiscal year, or March 2027. The banks have established a council to design the operational and governance frameworks required to issue the token under a trust arrangement. Under the proposed structure, the three banks will act as joint settlors while a designated trust bank or a similar institution will serve as trustee, responsible for safeguarding reserves and managing issuance and redemption processes.

The collaboration follows exploratory work that began with a pilot project in late 2025, intended to test whether multiple banks can comply with regulatory and practical requirements when co‑issuing a stablecoin. That pilot examined legal, operational and compliance questions, helping define responsibilities and processes across institutions. The council’s work aligns with Japan’s broader Payment Innovation Project, an initiative launched by the Financial Services Agency (FSA) to accelerate blockchain-based payment innovations within the country’s established FinTech experimentation frameworks.

Regulatory changes enacted in 2023 clarified the legal status of fiat-pegged stablecoins in Japan by amending the Payment Services Act. The revisions created a licensing regime that limits issuance and distribution of approved stablecoins to licensed banks, registered money transfer agents and trust companies. This regulatory clarity has enabled a number of yen-backed stablecoin initiatives from both startups and established firms, and it underpins the megabanks’ confidence to pursue a joint issuance model within a compliant framework.

Since the rules were clarified, several institutional projects have emerged. In October 2025, JPYC Inc. launched JPYC, the first legally recognized yen-denominated stablecoin. In February 2026, SBI Holdings and Startale Group introduced JPYSC, a trust bank-backed stablecoin intended for institutional and cross-border payments. More recently, the Japan Blockchain Foundation announced plans in May 2026 to issue EJPY on domestic and public blockchains. In parallel, dollar-pegged stablecoins have also gained approvals: USDC received approval for issuance in Japan in March 2025, and other USD-pegged projects have moved forward through partnerships with local firms.

The three megabanks’ joint approach is notable for its emphasis on institutional governance and legal compliance. By structuring issuance under a trust agreement and involving a trustee institution, the banks aim to provide clear custody and reserve management arrangements. This arrangement is intended to reassure regulators, counterparties and end users about the stability and reliability of the token. The emphasis on trust-backed issuance and multi-institution governance marks a conservative, credibility-first approach to stablecoin deployment.

Looking ahead, the council will continue refining operational details, including reserve management, issuance and redemption procedures, compliance controls, and potential use cases. Banks cited a desire to explore stablecoin utility across a wide range of applications, from domestic payments and corporate treasury functions to cross-border transfers and new settlement rails. The timeline targets fiscal year 2026 for a joint launch, with pilots and regulatory engagement continuing in the interim.

Overall, the initiative represents a convergence of established banking players, clearer regulation and public sector support for payment innovation. It demonstrates how incumbents can collaborate to create digital currency infrastructure that seeks to meet regulatory standards while opening new payment possibilities.

Key Insights Table