Japan’s Largest Banks Team Up to Launch a Yen-Pegged Stablecoin

Japan’s top three banking giants, Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank, are reportedly joining forces to issue a yen-pegged stablecoin aimed at modernizing Japan’s corporate settlement systems and cutting transaction costs. The initiative, revealed by Nikkei, represents a significant step in Japan’s ongoing effort to integrate blockchain technology into traditional finance.

The project will run on MUFG’s stablecoin issuance platform, Progmat, and is designed to standardize digital yen transactions across the country’s banking ecosystem. The three institutions collectively serve over 300,000 corporate clients, signaling a large-scale adoption potential for stablecoin-based payments and transfers. The launch is expected by the end of this year.

Mitsubishi Corp. will be the first to use the stablecoin internally for corporate settlements, including international transactions such as dividends and acquisitions. With more than 240 subsidiaries worldwide, the company expects to save significantly on transfer fees and administrative costs, potentially setting a model for other conglomerates.

MUFG first introduced the Progmat platform in June, allowing banks to issue stablecoins pegged to the yen on major public blockchains like Ethereum, Polygon, Avalanche, and Cosmos. The platform has since attracted industry partnerships, including a collaboration between Binance Japan and Mitsubishi UFJ Trust and Banking Corp. to explore stablecoin issuance for Web3 applications.

The stablecoin race in Japan is heating up. Fintech firm JPYC and financial services group Monex are also pursuing yen-backed digital assets following new regulatory guidelines from Japan’s Financial Services Agency. If successful, this banking consortium could mark a turning point in Japan’s transition toward a blockchain-integrated financial system.