Japan’s three largest banking groups — MUFG, SMBC and Mizuho — have jointly disclosed plans to introduce a bank-issued stablecoin backed by both the yen and the US dollar before the close of the current fiscal year. The institutions, which collectively serve more than 300,000 domestic corporate accounts, are positioning the token as a standardized settlement asset designed to accelerate payment cycles and compress administrative costs for inter-company transfers. Mitsubishi Corporation is slated to be the first multinational to put the token into live use across more than 240 subsidiaries, giving the pilot immediate scale.
The banks are effectively attempting to construct a shared digital cash rail for enterprise finance. By agreeing on a common token format and custody method, they aim to eliminate frictions caused by incompatible internal systems, correspondent intermediaries and batch processing windows. The initial deployment will prioritize yen settlement, with a later expansion to dollar-based issuances once the operational framework is proven stable.
Progmat Provides Regulated Token Infrastructure
The issuance will take place on MUFG’s Progmat platform, a regulated blockchain stack purpose-built for bank-grade tokens and announced in mid-2023. Progmat’s architecture was designed to meet Japan’s strict stablecoin statutes and to allow parallel issuance across multiple public blockchains such as Ethereum, Polygon, Avalanche and Cosmos. The system emphasizes standardized interfaces, custodial discipline and regulatory controls rather than permissionless innovation.
The platform enables tokens issued by different banks to remain interoperable for settlement without requiring bespoke integrations each time. MUFG has also indicated plans to extend compatibility to additional chains over time, suggesting the initiative is being structured for longevity rather than for a narrow pilot.
Cross-Border Layer via Project Pax and SWIFT
In a related track launched in September 2024, the same banks backed Project Pax, which connects SWIFT’s legacy messaging rails with blockchain settlement on Progmat. This design allows a bank to send a traditional SWIFT instruction while the final clearing occurs on-chain in the background. The method is intended to preserve compliance and reduce onboarding friction by shielding end users from direct interaction with digital assets.
The project is targeting structural pain points in the global cross-border payments market, which processes more than USD 182 trillion annually but still suffers from delays, fees and timezone bottlenecks. The system is being opened for collaboration with overseas financial institutions, with the stated goal of enabling 24×7 regulated settlement without requiring firms to custody or manage stablecoins directly.
Japan’s Regulatory Head Start Yields Institutional Uptake
Japan brought dedicated stablecoin regulations into enforcement in mid-2023, limiting issuance to licensed banks, regulated money transfer agents and trust corporations and obligating full backing and par redemption. That clarity has allowed incumbents to experiment inside defined guardrails, positioning Japan ahead of jurisdictions still debating public-private architectures or maintaining restrictive stances.
Industry tracking has recorded a sharp expansion in Japan’s digital asset usage, reportedly doubling year-on-year into mid-2025, making it one of the fastest-growing major markets in Asia-Pacific. The financial regulator has authorized the country’s first fully compliant yen-denominated stablecoin, and the current banking consortium has targeted issuance volumes of roughly one trillion yen over a three-year window.
Large enterprises view the model as a way to compress multi-layered international workflows, avoid repeated currency spreads and eliminate settlement lag tied to banking hours. The network effect becomes stronger as more of the 300,000 existing corporate customers adopt a single token standard for inter-firm transfers.
Global Convergence Toward Bank-Issued Stable Value
Japan’s initiative arrives amid a shift in which regulated banks — rather than crypto-native issuers — are building national-currency stablecoins. European banking coalitions are working on a euro-linked instrument expected by 2026; South Korea and Hong Kong are finalizing rules; and Japan Post Bank, Ripple, SBI and Binance Japan are advancing their own stable-value products, many anchored on the same Progmat stack.
With total stablecoin float now above USD 300 billion and overwhelmingly dollar-denominated, Japan’s yen issuance could mark the early phase of currency diversification in institutional settlement networks. Whether other governments follow similar templates remains unclear, but Japan is showing that bank custody, blockchain finality and regulatory supervision can be made to coexist at production scale.
