Japan’s Financial Services Agency has officially endorsed a joint stablecoin pilot initiative involving Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group.
The regulator on Friday said that it would provide support as the first project under the Payment Innovation Project (PIP). PIP is a newly established initiative by the regulator to promote innovation in the payment field.
The FSA expressed clarity on the stablecoin pilot presentation, adding that the service is expected to “improve user convenience and corporate productivity in Japan.”
Three of Japan’s largest banks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group, are working on a joint project to issue yen-backed stablecoins for Japanese users.
Cryptonews reported last month that the lenders would promote settlements made with pegged cryptocurrencies. The move aims to challenge the dominance of dollar-backed USDT and USDC stablecoins.
“The banks will build a structure for corporate clients to allow for stablecoins to be transferred between them along uniform standards, initially issuing a yen-pegged coin and potentially a dollar-pegged coin in the future,” Nikkei reported.
However, there has been no official joint statement from the banks involved.
In addition to the three major banks, Mitsubishi Corporation will serve as a business company, while Progmat will provide the issuance infrastructure. Besides, Mitsubishi UFJ Trust and Banking Corporation is expected to handle trust functions.
The experiment is expected to start “from November 2025 for the foreseeable future.” Full-scale efforts will begin toward practical application within this fiscal year.
The FSA said that the initiative “must be recognized as an innovative” effort.
Japan Ramps Up Stablecoin Launch
Last week, Japanese crypto exchanges and blockchain firms announced its intention to start “self-regulating” stablecoins. The body, named Japan Virtual Currency Exchange Association (JVCEA), has been formalized by the FSA.
Meanwhile, Japan launched its first yen-backed stablecoin last month, dubbed JPYC. The fully convertible yen stablecoin is backed by domestic bank deposits and Japanese government bonds.
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