The Financial Services Agency (FSA) has approved a pilot program that brings together the country’s three biggest banks, Mizuho Bank, MUFG, and Sumitomo Mitsui Banking Corporation (SMBC), to test a jointly issued stablecoin.
Digital assets meet tradfi in London at the fmls25
Backed by Japan’s Payment Regulator
The FSA confirmed on Friday that it will supervise the stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term trial as part of its newly launched Payment Innovation Project (PIP). The program aims to explore how multiple banking groups can issue and manage stablecoins classified as electronic payment instruments under Japanese law.
The consortium behind the pilot includes Mitsubishi Corporation, Progmat Inc., and Mitsubishi UFJ Trust and Banking Corporation. Together, they will issue yen-based digital tokens and test their use across corporate and consumer payment systems.
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The project builds on MUFG’s existing Progmat platform, a blockchain network already used for tokenized securities and asset-backed products.
“Furthermore, in light of the progress being made both domestically and internationally in examining the use of blockchain technology to enhance payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, on November 7, 2025, the "Payment Innovation Project" (PIP) , specializing in the payment field, was launched within the FinTech Demonstration Hub,” the regulator mentioned.
Read more: Following New FSA Stablecoin Rules, Japan’s Banks Plan Yen Pegged Tokens
By involving multiple institutions, the initiative seeks to determine whether Japan’s traditional banks can jointly operate a unified digital payment infrastructure—an approach that could significantly cut transaction times and costs.
The stablecoin pilot aligns with broader efforts by Japan’s largest banks to reform the nation’s corporate settlement framework. Mizuho, MUFG, and SMBC collectively serve over 300,000 business clients that still rely heavily on legacy clearing systems.
Overhauling Corporate Settlements
The trial will test whether stablecoins can streamline interbank transfers and cross-company payments without compromising security or regulatory compliance.
The trial marks the first initiative under the FSA’s Payment Innovation Project, a dedicated effort operating within its long-running FinTech Proof-of-Concept Hub. Established in 2017, the hub has served as Japan’s primary testing ground for new financial technologies.
Japan’s regulatory backing for this initiative reflects growing momentum in Asia’s race to modernize payment systems. As stablecoins gain traction in the U.S. and Europe, Japan’s decision to engage its largest banks in real-world testing underscores its intent to remain competitive in the digital finance landscape.
With the FSA at the helm, the stablecoin pilot may become a key step toward a more efficient, transparent, and innovation-driven financial infrastructure—one where blockchain and traditional banking finally converge.
