Japan’s FSA Backs Three Megabanks to Issue Joint Stablecoins

Highlights:

• Japan’s FSA reportedly backs the collaboration of three of the country’s biggest banks to issue stablecoins.
• The Japanese regulatory body wants to test whether the nation’s regulatory framework can support stablecoins jointly issued by multiple banking groups.
• The FSA is considering the overhaul of the nation’s regulatory guidelines to accommodate stablecoin operations.

On November 7, Japan’s Financial Services Agency (FSA) announced plans to support the issuance of stablecoins by three of the country’s biggest banks. According to a local Japanese news outlet, the three banks include Mitsubishi UFJ Bank (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Bank. 

Aside from the three megabanks, a few other companies will participate in the project. They include Mitsubishi Corporation, which will oversee the operation’s experiment. Progmat will provide the system that issues and manages the stablecoins, while Mitsubishi UFJ Trust and Banking Corporation will handle trust operations.

Japan’s Financial Services Agency has announced support for a pilot project in which MUFG, SMBC, and Mizuho will jointly issue a yen-backed stablecoin. As the first initiative under the Payment Innovation Project (PIP), the experiment aims to test the legal and operational…

— Wu Blockchain (@WuBlockchain) November 7, 2025

Testing to Begin this Month

According to the FSA, the goal of the experiment is to test whether Japan’s regulatory framework can support stablecoins jointly issued by multiple banking groups. The test phase begins this month, with full rollout targeted by the end of this year.

The Japanese regulatory body stated:

“The expected period for the experiment is “from November 2025 for the foreseeable future,” and full-scale efforts will begin toward practical application within this fiscal year.”

This marks the first official confirmation of the project, which had previously only been reported by the Nikkei Shimbun on October 17. Per reports, MUFG, SMBC, and Mizuho agreed to develop stablecoins pegged to the Japanese Yen and the US dollar. Combined, these banks have over 300,000 corporate customers in Japan. Their massive customer base will significantly boost the flow of stablecoins across enterprises and financial firms. Overall, stablecoins will reduce transaction costs while establishing a unified standard for corporate settlements and international transfers.

Japan’s FSA Considers Regulatory Reform to Support Stablecoins

On October 20, Crypto2Community reported that Japan’s regulatory body is planning an overhaul of the nation’s financial regulatory guidelines. Under the new proposal, Banking institutions are allowed to hold crypto as investments and even run exchanges. If enacted, this new rule will reverse the 2020 supervisory guidelines, which prohibit banks from owning cryptocurrencies.

Meanwhile, the FSA’s latest announcement shows that the plan is progressing under the country’s government oversight. Notably, the FSA will run the project as part of its latest Payment Innovation Project (PIP). The PIP is an initiative aimed at improving Japan’s payment systems and promoting the use of digital money in safe and regulated manners. 

BULLISH: 🇯🇵 Japan’s FSA plans to classify Bitcoin as a financial product in 2026. pic.twitter.com/IDftzNgi0T

— 🚨BSC Gems Alert🚨 (@BSCGemsAlert) November 1, 2025

JPYC Inc. Launches Japan’s First Yen-Denominated Stablecoin

On October 27, fintech firm JPYC Inc. launched JPYC, Japan’s first yen-pegged stablecoin, developed to compete in the global digital payment space. JPYC has full yen deposits and Japanese government bonds backing. It is compliant with the nation’s Payment Services Act and maintains 100% reserves. It also runs on top blockchains, including Avalanche, Ethereum, and Polygon. 

According to a statement issued by JPYC Inc., the company is targeting an issuance balance of over 10 trillion Yen within the next three years. Additionally, the company wants to develop a new social infrastructure through stablecoins. 

JPYC Inc. added in the statement:

“To accelerate this trend, we will further strengthen collaboration with partner companies and strive to develop products and build an ecosystem that meets a wide range of needs, both corporate and individual.”