Japan’s megabanks unite on digital yen and dollar stablecoin initiative
Japan’s three largest financial groups — Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMBC), and Mizuho Financial Group — are joining forces to issue a stablecoin pegged to both the Japanese yen and the US dollar.
The partnership marks a significant milestone in Japan’s efforts to modernise its financial system, improve settlement efficiency, and position itself in the global digital currency race.
According to a local report on October 17, the new stablecoin will initially be used by Mitsubishi Corporation for settlement purposes, paving the way for wider adoption across industries.
Megabanks move to simplify cross-border payments
The three banks, which together serve more than 300,000 business partners, are collaborating to build a unified stablecoin platform that reduces transaction costs and streamlines payments.
The system aims to make both domestic and international settlements faster and cheaper, addressing the inefficiencies of existing cross-border payment infrastructure.
Unlike conventional cryptocurrency projects, this initiative is fully backed by regulated financial institutions.
It reflects Japan’s growing interest in leveraging blockchain for practical financial applications rather than speculative trading.
The stablecoin, pegged to both the yen and the dollar, is expected to boost liquidity for businesses engaged in global trade, especially as Japan seeks to strengthen its position as a financial hub in Asia.
MUFG’s Progmat to ensure regulatory compliance
MUFG’s blockchain platform, Progmat, will take the lead in managing the issuance and governance of the stablecoin.
Designed to meet Japan’s financial regulations, Progmat provides the necessary compliance framework and transparency to satisfy the Financial Services Agency (FSA).
Through Progmat, the participating banks can issue tokenised financial instruments, ensuring that transactions remain secure and compliant.
This approach introduces an additional layer of reliability that could encourage other institutions to join the initiative.
The platform’s regulatory alignment also signals Japan’s intent to support blockchain-based innovation while maintaining control over systemic financial risks.
Japan accelerates its digital finance ambitions
The collaboration between MUFG, SMBC, and Mizuho forms part of Japan’s broader effort to modernise its financial infrastructure and compete with regional leaders like Hong Kong, South Korea, and China, all of which have advanced digital currency projects.
Earlier reports indicated that Japan’s FSA was preparing to approve the first yen-denominated stablecoin from fintech firm JPYC.
Although the approval is still pending, the regulatory environment has been easing, encouraging more institutions to explore digital asset issuance.
The government’s support for blockchain innovation is evident through new guidelines enabling banks and licensed companies to issue stablecoins tied to the yen.
The move is seen as a response to the global trend toward tokenisation and digital settlements, which could enhance Japan’s role in facilitating cross-border trade and finance.
A turning point for Japan’s crypto adoption
This latest initiative underscores how Japan’s financial system is gradually embracing blockchain-based payment solutions.
By combining the trust of traditional banking with the efficiency of digital currency, the stablecoin project could redefine how settlements are conducted within and beyond Japan.
As one of Asia’s largest economies, Japan’s push towards stablecoins may influence neighbouring markets and accelerate digital currency integration across the region.
While the country remains cautious about speculative crypto assets, it is clearly positioning itself to lead in regulated digital finance — with MUFG, SMBC, and Mizuho at the forefront of this transformation.
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