Japan’s Mega Banks Unite to Launch Yen-Backed Stablecoin for Global Settlements

Financial Giants MUFG, SMFG, and Mizuho Prepare Joint Rollout via Progmat Platform

TL;DR

• Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG), and Mizuho Financial Group plan to issue a yen-pegged stablecoin through MUFG’s Progmat platform.
• The project aims to streamline corporate and cross-border settlements for over 300,000 clients, with Mitsubishi Corporation set as a key early adopter.
• The stablecoin rollout is expected by the end of Japan’s fiscal year, with a future U.S. dollar version under consideration.

Japan’s largest banking groups are preparing to issue a yen-backed stablecoin designed to modernize domestic and international corporate settlements, marking one of the country’s most ambitious digital currency initiatives to date. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group are joining forces under MUFG’s blockchain platform, Progmat, to create a regulated digital asset pegged to the Japanese yen. The banks collectively serve more than 300,000 corporate clients and aim to standardize tokenized payments across companies and subsidiaries in a move that could reshape Japan’s financial infrastructure.

The new stablecoin will be used primarily for inter-company and cross-border settlements, reducing the need for intermediaries and currency conversion layers that slow down global transactions. Mitsubishi Corporation, one of Japan’s largest trading houses with over 240 subsidiaries worldwide, will be among the first major corporations to test the token for internal payments, dividend transfers, and acquisitions. The banks view this as a way to boost operational efficiency and enhance liquidity management for multinational clients operating across time zones and currencies.

Progmat, MUFG’s token issuance platform, serves as the backbone of the project and supports deployment across several public blockchains, including Ethereum, Polygon, Avalanche, and Cosmos. The technology will allow users to settle transactions securely while maintaining compliance with Japan’s financial regulations. Stablecoins in Japan can only be issued by licensed banks, trust companies, or registered fund-transfer businesses, following amendments to the Payment Services Act. A 2025 revision of the law now permits issuers to back up to 50 percent of reserves with government bonds or fixed-term deposits, making large-scale issuance more feasible.

Bank executives expect the yen-pegged token to be live by the end of the fiscal year, which concludes in March 2026, with a dollar-denominated version planned afterward. The system integrates with existing messaging networks like SWIFT’s API to trigger blockchain settlements, ensuring users can operate within familiar financial workflows. Compliance, interoperability, and bank custody are key pillars of the design, intended to make the token suitable for enterprise use rather than speculative trading.

The three-bank collaboration represents a shift in Japan’s digital asset strategy from retail crypto activity toward institutional infrastructure. Stablecoins have largely been dominated by U.S. dollar versions, accounting for roughly $300 billion in global circulation, and the yen-based project signals Japan’s ambition to capture a portion of that volume in regulated, enterprise-grade finance. Analysts see it as part of a regional competition with China’s digital yuan, Hong Kong’s tokenized payments, and South Korea’s upcoming stablecoin pilots.

According to a statement cited by local media, the initiative’s goal is to make the token interoperable across companies and industries, “standardizing payments within and between corporations.” Binance Japan general manager Takeshi Chino noted that stablecoins “fill an important role in financial services and are vital for Web3 adoption.” If successful, the project could serve as Japan’s first unified, bank-backed stablecoin network, positioning the country at the forefront of regulated digital currency infrastructure in Asia.

The broader cross-border payments market, valued at around $182 trillion, remains plagued by inefficiencies in speed and cost. Japan’s banking alliance sees the stablecoin as a way to address those issues while maintaining trust through full reserve backing and government oversight. The outcome of the rollout—measured by transaction volume, adoption among corporate clients, and integration across networks—will likely determine whether Japan’s approach becomes a model for other developed markets seeking to balance innovation with financial stability.

This article has been refined and enhanced by ChatGPT.