Japan’s leading financial institutions, Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMBC), and Mizuho Financial Group, are reportedly joining forces to issue stablecoins pegged to the Japanese yen and U.S. dollar in a bid to accelerate digital payments and settlement infrastructure across corporate networks.
The project, first reported by Reuters, would mark a major foray by traditional banks into the digital asset domain. The plan reportedly aims to initially deploy a yen-pegged stablecoin, with potential expansion into a dollar-pegged version later.
The new coins would be used for settlement by corporate clients such as Mitsubishi Corporation, and underpin a shared platform enabling seamless transfers among the banks’ extensive business partner networks.
Central to the initiative is Progmat, a blockchain infrastructure platform developed by MUFG. Progmat is expected to handle issuance, governance, compliance, and infrastructure of the stablecoins, ensuring alignment with legal and regulatory standards.
The collaboration reflects a broader trend: major banks worldwide are increasingly exploring stablecoins pegged to fiat currencies. In a related development, a consortium of global banks, including MUFG, has joined a pilot to issue stablecoins pegged to G7 currencies.
By leveraging blockchain rails, the bank group hopes to reduce settlement friction, lower transaction costs, and facilitate smoother cross-border flows. The combined business reach of the three banks, which serve hundreds of thousands of firms, gives the venture an immediate user base and scale advantage.
Notably, the stablecoin initiative signals a shift in how “bank money” might evolve in a tokenized economy, from mere ledger entries to programmable digital claims.
Still, success will depend on regulatory coordination; the banks must secure guidance and approval from Japan’s financial regulators, ensure robust custody and auditing frameworks, and ensure interoperability with existing payment systems.
If realized, the stablecoin project would place Japan among the world’s more advanced economies in adopting regulated, bank-backed digital currency, positioning its banking sector at the frontier of innovation in tokenized finance.