Japan’s Three Megabanks Move Toward Joint Stablecoin Launch as FSA-Backed Pilot Advances to Formal Council Stage

Japan’s three largest financial institutions — Mitsubishi UFJ Bank (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Bank — are preparing to reach a basic agreement on the joint issuance of a fiat-pegged stablecoin and are set to establish a dedicated council to govern its operational rollout ahead of fiscal year 2026. 

The move signals a major transition from exploratory pilot to institutional implementation for what would be one of the world’s most significant bank-backed digital currency projects.

The three megabanks have been jointly testing the issuance and use of stablecoins under a pilot backed by Japan’s Financial Services Agency (FSA), which has been providing guidance on legal frameworks and international developments in digital assets as part of a newly launched fintech support programme. The initiative operates under the FSA’s Payment Innovation Project (PIP), which coordinates public-private efforts to expand blockchain-based settlement systems, and will focus on testing lawful and appropriate methods for multi-bank stablecoin issuance.

The tokens will be pegged to real-world currencies, beginning with the Japanese yen, with a dollar-denominated version potentially to follow. The stablecoins will be built on a system allowing interoperability between banks under common technical and legal standards. The banks plan to standardize the token to make it interoperable for payments within and between companies, with Mitsubishi Corporation set to be the first entity to implement the stablecoin for internal settlements across its more than 240 global subsidiaries, streamlining international transfers on dividends, acquisitions, and customer transactions.

Infrastructure, Ambition, and a Broader Regulatory Shift

The stablecoin will run on MUFG’s Progmat platform, a blockchain system designed specifically for regulated financial institutions, which supports token issuance on multiple public blockchains including Ethereum, Polygon, Avalanche, and Cosmos. The three megabanks collectively serve over 300,000 major corporate clients across Japan, and have united specifically to drive stablecoin adoption at scale. The formation of a council tasked with considering practical implementation — taking into account applicable law and market trends — marks the next phase of converting pilot-stage findings into a commercially viable framework.

Under Project Pax, the consortium of MUFG, SMBC, and Mizuho is targeting one trillion yen in business-to-business stablecoin volume by 2028, with a limited rollout timed to align with Japan’s corporate planning cycle for fiscal year 2026. The scale of that ambition places the consortium’s initiative at the center of Japan’s broader digital finance transformation, with a parallel consortium of the country’s largest banks and securities firms also planning to tokenize Japanese government bonds and enable 24/7 instant settlement using stablecoins by the end of 2026.

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