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Ahmed Barakat
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MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corporation have established a formal joint council for Develop and participate in the issuance of a yen-backed stable cryptocurrency By the end of Japanese fiscal year 2026, March 2027.
The stablecoin will be issued under a credit agreement, with the three banks acting as joint settlors and a trust bank or similar institution acting as trustee. This is not a pilot. Three systemically important institutions have committed to a common infrastructure.
The initiative operates under the FSA’s Payment Innovation Project and follows a pilot in late 2025 to examine whether joint issuance of stablecoins between multiple banks can be implemented, in the banks’ words, “legally and appropriately.”
Clearly the answer was yes. Collectively, MUFG, Mizuho and SMBC oversee more than $7 trillion in assets, making it Japan’s largest institutional stablecoin initiative in Asia to date.
Japanese Payment Services Law: The regulatory structure behind joint issuance
Stablecoin regulation in Japan took shape in June 2023, when amendments to the Payment Services Law introduced a formal licensing system for stablecoins tied to fiat currencies, classifying them as electronic payment instruments.
The law restricts domestic issuance to three categories of entities: licensed banks, trust companies or trust banks, and registered money transfer service providers. This constraint is the structural moat through which giant banks pass.
The FSA’s Payment Innovation Project, housed within the FinTech Proof of Concept Center which has been operating since 2017, will provide the official channel for the pilot project in late 2025.
The updated PSA 2026 amendments came into full effect on 13 June 2026, tightening travel rule obligations for cross-border transactions and strengthening the FSA’s enforcement position. As of June 1, 2026, foreign credit-type stablecoins can also operate in Japan as electronic payment instruments under the revised Cabinet Office Law, provided they obtain Financial Services Authority (FSA) authorization, collateral administration, and auditing standards.
Reserve rules are specific: Trusted stablecoin issuers may invest up to 50% of reserves in short-term Japanese government bonds. The massive yen stablecoin is expected to be fully sequestered, backed by cash and Japanese government bonds held on credit, strictly in line with the FSA’s asset segregation and face value redemption requirements.
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JPY Cryptocurrency Space: JPYC, JPYSC, EJPY, and now the major banks
Giant banks are entering a yen stablecoin market that has moved rapidly since the 2023 regulatory clarity. JPYC launched Japan’s first legally recognized yen-denominated stablecoin, JPYC, in October 2025.
The Financial Services Authority subsequently classified it under the same framework as regulated payment services such as PayPay and Rakuten Pay in April 2026, an indication of how widespread the product is.
SBI Holdings and Startale Group followed in February 2026 with JPYSC, a trust bank-backed yen stablecoin issued by SBI Shinsei Trust Bank and targeting institutional and cross-border use cases.
The Japan Blockchain Foundation announced the release of EJPY in May 2026 on the Japan Open Chain and Ethereum.
On the dollar side, Major financial institutions are racing to establish a foothold in bank-issued cryptocurrenciesUSDC became the first dollar-pegged stablecoin approved in Japan in March 2025, and was issued by SBI, and Ripple and SBI Holdings announced plans to launch RLUSD in Japan.
What distinguishes the giant banks’ co-issuance model is regulatory heft, not technology. JPYC and JPYSC compatible products. A co-branded yen stablecoin from Japan’s three dominant banking groups carries a different system of institutional credibility, and a different range of potential settlement size.
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