Japan’s Financial Services Agency (FSA) has officially endorsed a joint stablecoin initiative led by the nation’s three biggest financial institutions—Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG), and Mizuho Financial Group. Announced on November 7, 2025, by Finance Minister Satsuki Katayama, the move clears the way for Japan’s first regulated stablecoin designed for corporate settlements and international transfers. The FSA will now review the project to ensure it meets legal and operational standards before its launch.
A Unified Stablecoin Infrastructure
The participating banks plan to issue a digital token initially pegged to the Japanese yen, with a potential U.S. dollar version on the horizon. Built on MUFG’s proprietary blockchain platform, Progmat, the stablecoin aims to create a shared payment infrastructure for Japan’s corporate sector.
Together, these three megabanks serve over 300,000 corporate clients—positioning the project for immediate large-scale adoption. The initiative is expected to modernize inter-company transactions and reduce settlement costs by replacing traditional correspondent banking with tokenized, blockchain-based payments.
Regulatory Framework and Oversight
Japan established a clear legal foundation for stablecoin issuance back in 2023. Under current regulations, only licensed banks, trust companies, and approved money transfer operators can issue stablecoins, and each token must be fully backed by reserve assets.
The FSA’s involvement underscores Japan’s commitment to both innovation and consumer protection. The agency will assess several key factors:
- Compliance with redemption and reserve requirements
- Custody and asset protection mechanisms
- Legal alignment for cross-border settlement
Positioning Japan as a Global Leader
By supporting this bank-led project, Japan reinforces its position as a global front-runner in regulated digital assets. If the pilot performs well, it could pave the way for broader use across the Asia-Pacific region and potentially enhance the yen’s role in digital trade.
Still, challenges lie ahead. Widespread adoption among corporations, legal coordination across jurisdictions, and proving clear cost advantages over existing systems will determine the project’s success. As one economist remarked, “Regulation is no longer the bottleneck—now it’s execution.” The coming months will reveal whether Japan’s institutional stablecoin can set a new global standard for digital payments.
