The Japanese banking giants are making a bold move into digital currencies. Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMBC) and Mizuho Financial Group announced that they will jointly issue a stablecoin pegged to the Japanese yen and the US dollar. The consortium expects to roll out the digital currency by the end of this fiscal year.
The three banks together serve more than 300,000 business customers across Japan. By creating a standardized digital token, they aim to reduce transaction costs and speed up payments between companies. Mitsubishi company will be the first company to use the stablecoin to settle payments across its more than 240 global subsidiaries.
Building on Progmat’s infrastructure
The stablecoin will run on MUFG’s Progmat platform, a blockchain system specifically designed for regulated financial institutions. MUFG announced Progmat Coin in June 2023, creating an infrastructure that allows banks to issue digital tokens on multiple public blockchains, including Ethereum, Polygon, Avalanche and Cosmos.
Unlike typical cryptocurrency platforms, Progmat emphasizes bank custody, regulatory compliance, and standardization. This means that different banks can issue tokens that work together seamlessly for business payments. The platform meets the strict requirements of Japan’s Financial Services Agency, which oversees all stablecoin issuance in the country.
The technical setup allows tokens issued by different banks to be standardized and used for payments within companies and between individual companies. MUFG plans to expand support to additional blockchain networks beyond the current four.
Project Pax: Connecting Traditional Banking to Blockchain
In September 2024, the same three banks supported Project Pax, a related initiative focused on cross-border payments. This project uses SWIFT’s existing messaging system to let banks instruct the Progmat platform to settle transactions on blockchain networks.
Project Pax addresses key pain points in international business payments. The $182 trillion global cross-border payments market faces persistent challenges in speed, cost and accessibility. By integrating SWIFT’s API framework with blockchain technology, banks can offer 24/7 settlement while maintaining compliance with anti-money laundering and regulatory standards.
The project started with a prototype phase and aims to involve financial institutions from other countries. Companies using the system do not have to deal with stablecoins directly. SWIFT messages will trigger blockchain settlements in the background, making the technology invisible to end users while enabling faster, cheaper transfers.
The Japanese regulatory framework is a global example
Japan established clear stablecoin rules in June 2022, which came into effect in June 2023. These rules specify that only licensed banks, registered money transfer companies and trust companies can issue stablecoins. The regulations require strong asset backing and guaranteed repayment at face value.
This regulatory clarity puts Japan ahead of most major economies. While the United States continues to debate comprehensive stablecoin legislation and China maintains strict crypto restrictions, Japan has created a workable framework that encourages innovation within secure boundaries.
The approach is already showing results. Japanese crypto adoption grew 120% year-over-year through June 2025 Chain analysis researchmaking it the fastest growing market among Asia and the Pacific’s top economies.
In late 2025, Japan’s FSA approved the country’s first regulated yen stablecoin from fintech company JPYC. The banks plan to issue 1 trillion yen worth of stablecoins over the next three years – about $6.64 billion at current exchange rates.
Practical benefits for companies
The stablecoin offers practical benefits for Mitsubishi Corporation and other large companies. International payments for dividends, acquisitions and customer transactions currently involve multiple intermediaries, currency conversions and processing delays. Each step adds cost and complexity.
With blockchain-based stablecoins, these payments can be settled in minutes instead of days. Businesses avoid duplicate currency conversion costs when dealing with multiple countries. Due to the 24/7 operation, payments are not held up by banking hours or time zones.
The standardization at three major banks creates network effects. As more of the more than 300,000 business customers adopt the system, the value increases for everyone who uses it. Businesses can make payments to any business partner whose bank participates, creating a unified digital payment network for Japan’s corporate sector.
Outside of Japan, the infrastructure could eventually connect to stablecoin systems in other countries, enabling truly seamless international business payments.
Broader implications for digital finance
The Japanese initiative is part of a global shift towards bank-issued stablecoins. Nine major European banks have announced plans to launch a euro stablecoin by the end of 2026. South Korea is preparing its own stablecoin legislation, while Hong Kong is creating a licensing regime for digital currency issuers.
The total stablecoin market recently surpassed $300 billion in circulation, although 99% is still pegged to the US dollar. The Japanese yen stablecoin – and similar efforts in other countries – could diversify this concentration and give companies more options that fit their real currency needs.
Other Japanese institutions are pursuing related projects. Japan Post Bank plans to launch DCJPY, a tokenized yen deposit, by fiscal year 2026. Ripple and SBI aim to introduce the RLUSD stablecoin to the Japanese market in early 2026.
Binance Japan partnered with Mitsubishi UFJ Trust and Banking Corporation in September 2023 to explore additional stablecoin issuance using the Progmat platform. These parallel efforts indicate broad institutional involvement in blockchain-based payment systems in Japan.
The way forward
The consortium’s end-of-year planning means that implementation will take place quickly. Mitsubishi Corporation’s initial deployment will include critical real-world testing before expanding to the banks’ entire customer base.
The banks will start with yen-pegged stablecoins before introducing dollar-pegged versions. This phased approach allows them to refine their operations and compliance procedures in familiar territory before expanding into multiple currencies.
Whether other countries adopt similar frameworks remains uncertain, but Japan is showing that banks and blockchain can work together under appropriate regulations. For businesses frustrated by slow, expensive international payments, this represents a meaningful step forward.
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