MUFG Bank, Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Bank are preparing to launch live transactions with a joint Japanese yen-pegged stablecoin by March 2027. This deadline coincides with the end of Japan’s fiscal year 2026. The project receives oversight from Japan’s Financial Services Agency (FSA), which encouraged the three megabanks to collaborate on a single framework rather than launching competing tokens.
The three banking groups hold a combined balance sheet of approximately $6.8 trillion and aim to modernize the nation’s payment infrastructure. By utilizing a trust-based issuance structure, the banks will act as joint settlors while a trust bank serves as the trustee. This initiative specifically targets business-to-business (B2B) payments and complex cross-border corporate settlements to improve efficiency over legacy systems.
The move provides a regulated alternative to the decentralized market where security remains a concern. The precision of this bank-led model stands in contrast to incidents like the StablR exploit, which resulted in unauthorized unbacked stablecoin sales. Japan’s megabanks intend to use their stablecoin to replace older settlement rails, including SWIFT and the domestic Zengin system, with instantaneous blockchain-based settlement.
Infrastructure and the Progmat blockchain platform
The technical foundation for this initiative is the Progmat platform. It was developed by MUFG in collaboration with NTT Data and several local banks. Progmat provides the necessary blockchain infrastructure to support a multi-chain architecture. This allows the stablecoin to operate across various public blockchains, including Ethereum, Polygon, Avalanche, and Cosmos, offering flexibility for corporate users.
Under the Japanese Payment Services Act (PSA), these tokens are classified as “specific trust beneficiary rights.” This legal designation ensures the stablecoin meets the strict standards set by the FSA’s Payment Innovation Project (PIP). By using programmable blockchain technology, the banks hope to automate manual verification processes that currently slow down international commerce.
The banks have already completed initial testing to prove the system’s viability. In November 2025, they launched a pilot with Mitsubishi Corporation. This trial focused on international intra-group transfers involving more than 200 subsidiaries. During the pilot, Mitsubishi UFJ Trust and Banking Corporation managed the trust-based issuance structure, confirming the model’s ability to handle high-volume corporate requirements.
Regulatory framework and Japanese stablecoin policy
Japan’s regulatory environment has become a catalyst for this development. The 2022 legislation defined stablecoins as digital money and limited issuance to licensed banks and trusts. Revisions to the PSA are scheduled to take effect on June 1, 2026. This clear legal path differs from other regions where officials, such as Treasury nominee Scott Bessent, have expressed skepticism regarding central bank digital currencies.
Support for the project also comes from Japan’s ruling Liberal Democratic Party (LDP). The party’s “Next-Generation AI and On-Chain Finance Initiative Group” has advocated for the use of yen-based stablecoins for settlement throughout Asia. This political backing underscores the project’s role as a component of national financial infrastructure rather than just a private commercial venture.
As the rollout nears, the three megabanks plan to establish a voluntary council to finalize operating and governance frameworks. This council will study market conditions and Japanese laws to ensure a smooth launch. The initiative has set an ambitious commercial objective, targeting approximately one trillion yen, or $6.5 billion, in aggregate transaction volume by 2028.
Future outlook for the megabank collaboration
The March 2027 debut marks a significant milestone in Japan’s digital transformation. The banks are now focusing on the commercial applications of the token, particularly for trade finance. While Bitcoin continues to see whale accumulation during market shifts, the Japanese megabanks are positioning their stablecoin as a stable, programmable tool for industrial use.
Success will depend on how the joint stablecoin interacts with existing digital yen projects. Competitors such as JPYC and SBI Holdings have already entered the market with their own yen-backed tokens. The collaboration between MUFG Bank, SMBC, and Mizuho Bank represents a formidable entrance that could centralize liquidity within the Japanese stablecoin ecosystem.
The final phase of preparation will involve fine-tuning technical designs and finalizing custody arrangements. If the March 2027 deadline is met, Japan could become one of the first major economies to have its primary commercial banks operating a unified, blockchain-based settlement system. The project moves Japan significantly closer to its goal of 24/7 programmable financial operations.