Japan’s three megabanks form council for joint yen stablecoin

MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corporation have formed a council to develop operational frameworks and jointly issue a yen-pegged stablecoin under a trust agreement, aiming for launch by the end of the 2026 fiscal year in March 2027.

The banks will act as joint settlors and plan to appoint a trust bank or a similar institution as trustee. The council will design rules for issuance, custody and settlement so the token can operate within Japan’s financial regulations.

The effort follows a pilot that began in late 2025 to test whether several banks can share issuance responsibilities while meeting regulatory and operational requirements. That pilot runs under the Financial Services Agency’s Payment Innovation Project, a program created to accelerate blockchain-based payment experiments.

Japan amended the Payment Services Act in 2023 to create a licensing regime for fiat-pegged stablecoins. Under the law, only licensed banks, registered money transfer agents and trust companies may issue and distribute approved stablecoins. Since the change, multiple yen-backed and dollar-pegged stablecoins have been launched or approved in Japan, including the first legally recognized yen stablecoin in October 2025 and a dollar-pegged token approved in March 2025.

The council will address governance, reserve management, redemption processes and technical connectivity with payment systems. It will also assess ways to integrate the token with existing banking services and cross-border settlement flows.

The banks plan to move from pilot testing to a commercially available product within roughly two years, subject to regulatory approval and successful completion of the proof-of-concept work.