Japan's three largest banks – including MUFG Bank and Mizuho Bank – have signed a memorandum of understanding to jointly issue a stablecoin pegged to the yen. The group aims to start live commercial transactions before March 2027.
The dollar’s grip on the stablecoin market
Right now, dollar-pegged stablecoins dominate the global market. They account for an estimated 84% to 90% of all stablecoins, a sector worth over $300 billion. That leaves very little room for other currencies. Japan's banks are betting a yen-backed alternative can carve out a slice of that market, especially for domestic payments and cross-border trade.
Governance council formed
Alongside the MOU, the banks set up a governance council to oversee the project. That council will handle technical standards, compliance, and how the stablecoin is backed – likely by yen deposits or government bonds. The three are moving together, which signals they want a unified platform rather than competing yen tokens.
What has to happen before 2027
The banks still face regulatory hurdles. Japan's Financial Services Agency has been cautious about stablecoins, requiring issuers to hold full reserves and operate under strict oversight. The banks will need to clear those rules and build the actual infrastructure – wallets, exchanges, merchant systems – in time for a commercial rollout. The deadline is less than three years away, but with the MOU and council in place, the planning phase is already underway.
