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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 to develop and co-issue a yen-backed crypto stablecoin by the end of Japan fiscal year 2026, March 2027.
The stablecoin will be issued under a trust agreement, with all three banks acting as joint settlors and a trust bank or similar institution serving as trustee. This is not a pilot. Three systemically important institutions have committed shared infrastructure.
The initiative operates under the FSA’s Payment Innovation Project and follows a late-2025 pilot examining whether multi-bank stablecoin co-issuance could be carried out, in the banks’ words, “legally and appropriately.”
The answer, evidently, was yes. Collectively, MUFG, Mizuho, and SMBC oversee more than $7 trillion in assets, making this the largest institutional Japan stablecoin initiative in Asia to date.
Japan Payment Services Act: The Regulatory Architecture Behind the Joint Issuance
Japan’s stablecoin regulation crystallized in June 2023, when amendments to the Payment Services Act introduced a formal licensing regime for fiat-pegged stablecoins, 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 fund transfer service providers. That restriction is the structural moat the megabanks are stepping through.
The FSA’s Payment Innovation Project, housed within the FinTech Proof-of-Concept Hub operational since 2017, provided the formal channel for the late-2025 pilot.
Updated PSA 2026 amendments took full effect June 13, 2026, tightening travel-rule obligations for cross-border transactions and reinforcing the FSA’s enforcement posture. From June 1, 2026, foreign trust-type stablecoins can also operate in Japan as electronic payment instruments under a revised Cabinet Office Ordinance, provided they clear FSA licensing, collateral management, and audit standards.
Reserve rules are specific: trust stablecoin issuers may invest up to 50% of reserves in short-term Japanese government bonds. The megabank yen stablecoin is expected to be fully reserved, backed by cash and JGBs held in trust, aligning precisely with the FSA’s asset-segregation and redemption-at-par requirements.
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Japan Yen Crypto Stablecoin Field: JPYC, JPYSC, EJPY, and Now the Megabanks
The megabanks are entering a yen stablecoin market that has moved fast since 2023’s regulatory clarity. JPYC Inc. launched Japan’s first legally recognized yen-denominated stablecoin, JPYC, in October 2025.
The FSA subsequently classified it under the same regulated payment services framework as PayPay and Rakuten Pay in April 2026, a signal of how mainstream the product has become.
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 EJPY in May 2026, to be issued on Japan Open Chain and Ethereum.
On the dollar side, major financial institutions are racing to establish bank-issued crypto footholds, USDC became the first dollar-pegged stablecoin approved in Japan in March 2025, issued by SBI, and Ripple and SBI Holdings have announced plans to launch RLUSD in Japan.
What distinguishes the megabank co-issuance model is regulatory weight, not technology. JPYC and JPYSC are compliant products. A jointly branded yen stablecoin from all three of Japan’s dominant banking groups carries a different order of institutional credibility, and a different scale of potential settlement volume.
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