Japan's three biggest banks — MUFG, Sumitomo Mitsui, and Mizuho — are moving ahead with plans to launch a joint yen-pegged stablecoin by the end of fiscal year 2026, which falls on March 31, 2027. The banks signed a memorandum of understanding this week to set up a voluntary council that will hammer out operational frameworks, governance, and practical implementation issues. It's the strongest signal yet that Japan's traditional financial giants are serious about issuing their own digital currency.
The plan and the timeline
The stablecoin will be issued under a trust agreement, with a trust bank acting as trustee and the three banks as joint settlors. That structure fits neatly under Japan's 2022 amendments to the Payment Services Act, which lets licensed money transfer companies, trust companies, and banks issue yen-denominated tokens. The banks aim to start using the stablecoin for commercial transactions sometime during FY2026 — a nine-month window that ends next March. They began exploring the idea in late 2025 and initially hoped for a launch in FY2025, but the timeline slipped.
The regulatory push behind it
Japan's stablecoin rulebook has been taking shape for a while. The Payment Services Act was amended in 2022 to create a legal framework for these tokens. More recently, the Financial Services Agency expanded a Cabinet Office Ordinance to recognize certain trust-type stablecoins issued by foreign trust banks as electronic payment instruments under the same law. That move opened the door for cross-border use. On the political side, the Liberal Democratic Party just called for rules to allow crypto ETFs and explicitly promoted yen-denominated stablecoins in a recent proposal.
Previous pilots and existing tokens
This isn't the banks' first stab at stablecoin tech. In November 2025, the three lenders ran a pilot under the FSA's Payment Innovation Project using Progmat infrastructure — a platform built by a consortium that also includes SBI Holdings. That test gave them a head start on the operational side. Meanwhile, other players are already live. Tokyo fintech company JPYC launched the first yen-pegged token, backed by reserves in bank deposits and government bonds. And SBI Holdings partnered with Startale Group for JPYSC, a trust bank-backed yen stablecoin aimed at institutional and cross-border payments.
The banks have to finalize the council's membership and get the governance details sorted before they can move to issuance. They're targeting commercial transactions during FY2026 — that's the stretch from now through March 2027. If they hit that timeline, Japan will have a stablecoin issued by its three largest lenders, backed by the country's banking infrastructure and operating under a regulatory framework that's already been tested. That's a lot more concrete than a pilot.
