Japan megabanks plan joint yen stablecoin by March 2027

MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corporation signed a memorandum of understanding on June 10, 2026 to jointly issue a yen‑pegged stablecoin for live corporate transactions by March 2027. The token will be issued on MUFG’s Progmat distributed ledger platform and operate under oversight from Japan’s Financial Services Agency (FSA).

The banks will act as co‑settlors under a trust agreement while a separate trust bank or equivalent institution will serve as trustee. The yen reserves backing the token will be held in a legally segregated account, separate from any single issuer’s balance sheet. Under the FSA framework, a stablecoin issued this way is treated as a deposit and is subject to prudential rules that apply to bank deposits.

The MOU establishes a voluntary council to finalize governance, operational rules and issuance architecture. The council will set details such as issuance limits, reserve management procedures, interoperability with other tokens and governance voting arrangements. The banks aim to begin commercial transactions during fiscal 2026, which ends in March 2027.

Prior pilot work for the project explored issuance levels targeting roughly 1 trillion yen, about $6.7 billion, by 2028. Initial use cases identified by the banks focus on securities settlement and wholesale business‑to‑business cross‑border payments rather than retail payments.

Progmat is a distributed ledger platform incubated inside MUFG and developed with NTT Data. It supports multiple chains including Ethereum, Polygon, Avalanche and Cosmos, and has been used in earlier tokenization projects and a cross‑border payments initiative called Project Pax. Project Pax was selected by the FSA’s FinTech Proof‑of‑Concept Hub in November 2025.

The banks plan a dollar‑pegged token to follow the yen launch within the same fiscal year to support domestic and cross‑border dollar payment corridors.

The announcement comes as U.S. dollar‑pegged stablecoins account for an estimated 84% to 90% of a roughly $300 billion global stablecoin market. Private yen stablecoins hold a small share of that market; the leading private yen issuer has a market cap near $18 million. The three banks together manage more than $7 trillion in assets.

Political and regulatory changes have coincided with the banks’ plan. On June 1, 2026, a panel of the ruling Liberal Democratic Party recommended promoting yen‑based stablecoins for settlements across Asia and proposed a legal framework for crypto ETF trading. The same day Japan updated rules to recognise certain foreign‑issued stablecoins as electronic payment instruments and set conditions for licensed operators to handle qualifying digital assets.

The MOU does not list other participants, and the banks said additional institutional members and financing partners could join the system later. The council will complete operational and governance work before any commercial issuance takes place, and the trust structure and FSA oversight will apply to any live operations.