Japan's three major banks announce joint issuance of Japanese yen stablecoin: the Financial Services Agency approves Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho to participate in payment innovation PIP

Japan’s Financial Services Agency (FSA), along with the three major banks—Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho—has launched a pilot experiment for a Japanese Yen stablecoin, validating a new digital payment model through multi-bank collaboration and strict regulation. (Background: The world’s first Yen stablecoin, JPYC, has gone live! Approved by Japan’s FSA, backed by Japanese government bonds, and supporting multi-chain deployment.) (Additional context: Is the Yen finally set to rise after hitting bottom? Wall Street hedge funds are heavily buying Yen, betting on currency appreciation.)

On November 7, the FSA announced the launch of the “Payment Innovation Project” (PIP), approving the three banks to jointly issue a Yen stablecoin. This move signifies Japan’s pragmatic approach to fintech competition, emphasizing regulation and collective action, and sets a new standard for future cross-border settlements and corporate payments.

Strict Regulatory Framework, Stablecoin Comes to Reality
Under Japan’s revised Payment Services Act, stablecoins must be issued by licensed financial institutions and backed 1:1 with domestic bank deposits or Japanese government bonds. The FSA has incorporated the three banks’ project into the initial phase of PIP, requiring comprehensive custody, clearing, and risk management mechanisms. A few months of pilot testing will observe the feasibility of multi-bank issuance and management. With clear legal and regulatory guidance—previously only rumors—this provides market participants with rare certainty.

Progmat Builds Multi-Chain Infrastructure
Mitsubishi UFJ’s blockchain platform, Progmat, serves as the technical core. It natively supports multiple public blockchains such as Ethereum, Polygon, Avalanche, and Cosmos, offering unified token standards, strict custody protocols, and transaction auditing tools. This means enterprises can issue, transfer, and settle Yen stablecoins across different chains within a compliant framework, reducing systemic risks from siloed systems. Additionally, Progmat integrates with bank core systems to ensure each on-chain Yen stablecoin corresponds to real-world assets.

Enterprise Payments and Cross-Border Vision
Initially, PIP focuses on payments between enterprises and banks. Mitsubishi Corporation has committed to trialing the system across over 240 subsidiaries in various sectors, including import/export, energy, and retail. For the 300,000 corporate clients of the three banks, stablecoins could shorten settlement times and lower foreign exchange and administrative costs. If successful, FSA plans to expand to cross-border scenarios and evaluate the feasibility of USD-pegged stablecoins, enabling Japanese companies to facilitate smoother capital flows within Asia and global supply chains.

Balancing Innovation and Risk Control
Compared to the ongoing legislative debates in the US and Europe, Japan’s clear regulations and government-backed pilot programs provide a tangible pathway for market adoption. The FSA’s “sandbox first, then approval” approach allows public and private sectors to test technologies in controlled environments before broader deployment. This model addresses the urgent need for financial innovation while maintaining zero tolerance for systemic risk. Looking ahead, Japan’s groundwork for CBDC (Central Bank Digital Currency) could leverage these regulatory and technological foundations for competitive advantage.

Overall, Japan’s PIP is not just about launching a new token but using stablecoins as a lever to reshape the payment ecosystem and strengthen its position as an international financial hub. The success of this experiment will influence enterprise adoption and future regulatory adjustments, offering a valuable reference for other countries balancing digital currency regulation and innovation.

Related Reports

• JPMorgan: USDC surpasses USDT in on-chain activity; Circle’s regulatory advantages make it the preferred institutional choice
• Taiwan’s Central Bank calls for regulation of stablecoins; VASP legislation draft submitted for review
• Financial black hole: Stablecoins are swallowing banks and reshaping the global financial architecture

This article was originally published by BlockTempo, a leading blockchain news media.