Japan’s three largest banks — Mitsubishi UFJ (MUFG), Sumitomo Mitsui (SMBC), and Mizuho — are moving to jointly issue a yen-pegged stablecoin by the end of fiscal year 2026 in March 2027, according to reports from Nikkei.
The banks are expected to establish a council to finalize operational frameworks after completing months of testing under a pilot program backed by Japan’s Financial Services Agency (FSA).
Megabanks Move From Pilot to Implementation
The three banking groups have been jointly testing stablecoin issuance and settlement since November 2025 as part of an FSA-supported pilot initiative.
Sponsored
According to a Nikkei report, the banks are nearing a basic agreement on the project and will establish a council to examine operational models, legal requirements, and market conditions ahead of launch.
MUFG, SMBC, and Mizuho plan to create a unified framework for stablecoin transactions, allowing corporate clients to transfer digital assets seamlessly between institutions. The project is expected to use blockchain infrastructure developed by Tokyo-based Progmat.
Progmat supports multiple public networks including Ethereum, Polygon, Avalanche, and Cosmos, and was designed specifically for regulated financial institutions.
The three banks collectively serve over 300,000 major corporate clients across Japan, with Mitsubishi Corporation reportedly among the first intended adopters.
Project Pax Targets Institutional Payments
The initiative is part of what has been referred to as Project Pax, a Japanese blockchain payments initiative to modernize payment and settlement infrastructure through blockchain technology.
Under Project Pax, the consortium is targeting one trillion yen in business-to-business stablecoin volume by 2028 — roughly $6.5 billion. The stablecoin will initially be pegged to the yen, with a US dollar-denominated version expected to follow later in the year.
A dollar-backed stablecoin issued by Japanese megabanks would carry significant cross-border settlement implications, potentially competing with or complementing USDC and USDT across Asian trade finance corridors.
Japan Continues Stablecoin Regulatory Push
Japan has emerged as one of the most active jurisdictions in developing legal frameworks for stablecoins and tokenized financial products.
The FSA has worked closely with the megabanks through its Payment Innovation Project (PIP), which seeks to expand blockchain-based payment infrastructure while maintaining regulatory oversight.
Why This Matters
Three of the world’s largest banks agreeing to issue a single jointly governed stablecoin under regulatory supervision represents the kind of institutional coordination that typically sets precedent globally.
If Project Pax reaches its 2028 volume targets, it would position Japan’s banking system as a foundational rail for blockchain-based settlement across Asia and beyond.
Check out DailyCoin’s popular crypto news now:
DTCC Chose XLM: Stellar CEO Gives The Inside Story
Humanity Protocol Hack: H Token Crashes 90%
People Also Ask:
MUFG, SMBC, and Mizuho are jointly developing a yen-pegged stablecoin under Japan’s FSA supervision, with plans to launch by fiscal year 2026.
The stablecoin will run on Progmat, a blockchain infrastructure platform that supports Ethereum, Polygon, Avalanche, and Cosmos.
Project Pax is the consortium name for the MUFG, SMBC, and Mizuho stablecoin initiative, targeting one trillion yen (~$6.5 billion) in business-to-business stablecoin volume by 2028.
