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 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.
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, on November 7, 2025, the ‘Payment Innovation
Project,’ specializing in the payment field, was launched within
the FinTech Demonstration Hub,” the regulator explained.
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 reportedly 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.
This article was written by Jared Kirui at www.financemagnates.com.
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