Japan’s three largest commercial banks have successfully completed a joint pilot of a yen-denominated stablecoin designed for cross-border corporate payments. The trial, conducted with support from the Financial Services Agency, tested the full cycle of issuance, transfer and redemption between domestic and overseas operations of a major trading company.

Pilot Details and Participants

Mizuho Bank, MUFG Bank and Sumitomo Mitsui Banking Corporation acted as joint issuers in the project. Mitsubishi UFJ Trust and Banking Corporation served as trustee, while TISI Inc. also took part. The corporate client was Mitsubishi Corporation, with payment flows simulated between its Japanese headquarters and overseas offices.

The closed trial ran from July 17 to July 23, 2026. It examined operational, regulatory and system requirements under a trust-based structure. The stablecoin was issued as trust beneficiary rights and classified as an electronic payment instrument under Japan’s Payment Services Act. Reserves consisted of bank deposits, and access was limited to verified users.

Project participants reported that the system handled the complete transaction cycle without technical problems. The test confirmed the feasibility of the joint issuance model along with the safety and reliability of the underlying processes. Legal compliance, transaction security and measures against money laundering and terrorist financing were also reviewed.

Regulatory Support and Commercial Timeline

The Financial Services Agency selected the project for its payment innovation program in November 2025 and provided support through its FinTech Experimental Hub. In June 2026 the three banks signed a memorandum of understanding to form a voluntary council that will address operations and governance issues.

The banks aim to begin live commercial transactions during Japan’s fiscal 2026, which ends in March 2027. The proposed design relies on deposits as reserves and restricts circulation to bank-verified users, though the framework remains subject to adjustment.

A commercial launch would require the participating institutions to establish clear legal responsibilities for token custody and to reconcile account balances across banks. Cross-border use would also involve foreign-exchange conversion and compliance with regulations in both the originating and receiving jurisdictions.

Broader Digital Asset Initiatives

The stablecoin project forms part of wider efforts by Japanese financial institutions to apply blockchain technology to payments and trade. In September 2026 the Financial Services Agency selected a related digital trade initiative that links electronic trade documents with stablecoin payments. Participants include the same three banks, Mitsubishi UFJ Trust, TradeWaltz and NTT DATA.

Separately, the agency is supporting research into tokenized bank deposits that would allow customers of different banks to transfer digital deposits and settle interbank transactions. These programs indicate continued official interest in blockchain applications for both domestic and international finance.

Issuance of the yen stablecoin is expected to utilize Progmat, a digital asset platform developed by MUFG that operates on the Avalanche blockchain. The platform is intended to keep compliance oversight and transaction fees within the banking sector’s control.

Historical Context and Parallel Systems

The three megabanks previously participated in the SBI Ripple Asia consortium, which focused on RippleNet for domestic and international transfers. In more recent years Mizuho Bank and an investment subsidiary of Sumitomo Mitsui Banking Corporation have entered agreements with Ripple Labs concerning tokenization and decentralized finance infrastructure on the XRP Ledger.

Official project documents do not reference Ripple technology for the yen stablecoin itself. Industry commentary has noted that the Progmat-based system could operate as a closed network primarily serving corporate business-to-business transfers that require regulatory certainty. Parallel open systems, including regulated dollar stablecoins and XRP-based liquidity, may continue to serve retail cross-border and fintech use cases.

The completed pilot marks a concrete technical step toward coordinated interbank stablecoin operations under Japanese regulatory oversight. Further progress will depend on finalizing governance arrangements, meeting ongoing compliance requirements and securing adoption by corporate clients for actual commercial payments.