What happened?
Japan’s Financial Services Agency officially backed a pilot to issue yen-backed stablecoins led by Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho under a new Payment Innovation Project. The project will build a shared framework for corporate transfers, involve Mitsubishi Corporation and Progmat for issuance infrastructure, and start experiments from November 2025 with full-scale efforts this fiscal year. The FSA said it will support the effort as an innovative service expected to improve user convenience and corporate productivity.
Who does this affect?
The move affects the three megabanks, their corporate clients, fintech partners and infrastructure providers like Progmat, plus Mitsubishi UFJ Trust handling custody. It also impacts Japanese businesses and consumers who could use yen-pegged stablecoins for payments and settlements, as well as crypto exchanges and the JVCEA self-regulatory group. International stablecoin issuers and dollar‑pegged coin users will feel the shift too, since this is a direct push to build domestic alternatives to USDT and USDC.
Why does this matter?
This could reshape the payments landscape by increasing on‑shore stablecoin adoption, speeding up settlements and lowering frictions for corporate treasury operations. A bank-backed yen stablecoin with FSA support may attract liquidity away from dollar‑pegged coins, encouraging more trades and products settled in yen and strengthening domestic payment rails. If successful, it could boost competition, push other institutions and regulators to launch similar projects, and ultimately influence FX flows and market structure in both crypto and traditional finance.