Yen stablecoin plans in Japan advanced as MUFG Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank prepared joint live transactions for fiscal 2026. The year ends in March 2027. The project follows a pilot backed by Japan’s Financial Services Agency.
The three banks signed a memorandum to create a voluntary council. The group will prepare the operating model, governance rules, and system design for the shared issuance framework. It will also review legal and market conditions before live transactions begin.
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Japan Banks Set Trust Model for Yen Stablecoin Project
This token will be issued on the basis of the trust agreement. The MUFG, SMBC, and Mizuho banks will be settlors in this arrangement. In turn, a trust bank or any other organization will become a trustee for issuing this currency.
The structure would allow the banks to use one framework instead of separate tokens. It is designed to support common standards for issuance and operations. The official statement did not provide the token size, blockchain network, retail access terms, or exact launch date.
The intended council will evaluate the issuance infrastructure and its operations. In addition, governance, system requirements, and compliance requirements. The banks will expedite their activities following the signing of the memo.
MUFG, SMBC, and Mizuho will set up the council initially. Other firms involved in financing may later become members of the yen stablecoin system. The banks have yet to announce the initial commercial partners and the initial payment channel.
The yen stablecoin project will assist in various payment applications. Nonetheless, no information was provided by the banks concerning whether early transactions will involve corporate payments. Furthermore, they have not confirmed whether consumers will be able to use the Yen stablecoin at launch.
FSA Pilot Tested Joint Stablecoin Issuance in Japan
The FSA-sponsored proof-of-concept was initiated in November 2025. This project involved the joint issuance of stablecoins and cross-border payments through Mitsubishi Corporation’s offices in Japan and abroad. The Mitsubishi UFJ Trust and Banking Corporation oversaw the trust-based issuance model for the project.
The Progmat platform provided the blockchain infrastructure for the trial. Requirements and criteria were created by the three participating banks. The pilot evaluated compliance and consumer protection based on the Japanese payment legislation.
Japan’s Payment Services Act permits stablecoins to be used as a means of electronic payment, provided that they comply with certain requirements and rules. This regulatory structure is behind the new yen stablecoins introduced in the nation.
This particular banking project will join other regulated yen token initiatives in Japan. The company JPYC had its yen stablecoin introduced in October 2025. This has been another initiative by SBI Holdings and Startale, focused on an institutional Yen stablecoin.
The Liberal Democratic Party, the party currently in power in Japan, supports broader use of yen stablecoins, tokenized deposits, and around-the-clock settlement of funds. The party supported clear regulations regarding the payments of taxes, salaries, and corporate purposes.
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