Japan’s Top Banks to Pilot Yen-Backed Stablecoin Under FSA’s Payment Innovation Project

TLDR:

• Japan’s FSA backs the first multi-bank yen stablecoin pilot under the Payment Innovation Project.
• MUFG, SMBC, and Mizuho will jointly issue a regulated yen-backed digital asset starting November 2025.
• The project includes Progmat and Mitsubishi Corporation to manage issuance and trust functions.
• The pilot aims to verify legal compliance for stablecoins across Japan’s top banking groups.
  

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Japan’s Financial Services Agency (FSA) has approved a pilot program involving MUFG, SMBC, and Mizuho to jointly issue a yen-backed stablecoin. 

The project, starting November 2025, marks the first initiative under the new Payment Innovation Project (PIP). It aims to test legal and operational models for stablecoin issuance across multiple banks. 

The move confirms earlier reports of collaboration among Japan’s leading financial institutions.

Japan’s Megabanks Join Forces for Stablecoin Experiment

According to Wu Blockchain and a November 7 report, the FSA formally endorsed the pilot, bringing together Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank. The Nikkei newspaper had previously reported plans for a joint stablecoin initiative, but this is the first official confirmation from regulators.

The pilot will examine how Japan’s top financial groups can issue and manage stablecoins under existing compliance frameworks. 

It also seeks to determine whether multiple banks can coordinate issuance while meeting legal standards. The FSA described this as a test of both regulatory feasibility and operational execution.

The project also includes Mitsubishi Corporation and Progmat, which will provide the issuance infrastructure. Mitsubishi UFJ Trust and Banking Corporation will oversee the trust component to ensure asset protection and accountability. The collaboration brings together Japan’s largest banking and corporate entities under one regulatory umbrella.

The experiment is expected to begin in November 2025 and continue “for the foreseeable future.” According to the coverage, full-scale operations could start within the same fiscal year once results from the pilot are assessed.

Payment Innovation Project Aims to Modernize Japan’s Financial System

The Payment Innovation Project (PIP) was established by the FSA to foster new payment models and digital currency use cases. By supporting the stablecoin pilot as its first initiative, the regulator signals growing interest in regulated blockchain-based settlements.

The yen-backed stablecoin will serve as a testbed for Japan’s broader digital finance ambitions. It could streamline interbank transfers, enable programmable payments, and reduce reliance on existing settlement networks. Industry observers view the FSA’s support as a clear step toward integrating blockchain into Japan’s financial infrastructure.

According to the report, the project aligns with Japan’s ongoing exploration of central bank digital currency (CBDC) design principles. However, this initiative remains strictly within the private sector, distinguishing it from central bank experiments.

As the pilot progresses, the involvement of MUFG, SMBC, and Mizuho places Japan at the forefront of regulatory-backed stablecoin development. The program’s success could shape future frameworks for digital assets in one of the world’s most tightly regulated markets.

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