What To Know:
- Japan’s top three megabanks, Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho, plan to jointly issue yen- and dollar-backed stablecoins, starting with a yen-pegged version.
- The initiative aims to modernize Japan’s payment systems, enabling 24/7 settlements, lower fees, and seamless blockchain-based transactions for over 300,000 corporate clients.
- The move positions Japan as a frontrunner in regulated digital finance.
Japan’s top banking firm, i.e, Mitsubishi UFJ Bank, along with Sumitomo Mitsui and Mizuho, have announced plans to jointly issue stablecoins backed by fiat currencies like the Japanese yen and the US dollar.
Japan’s Top Banks Launch USD and Yen-backed Stablecoin
According to a local media report, the first phase will launch a yen-pegged stablecoin, followed later by a dollar-pegged version. The coins will be launched under uniform industry standards which allows seamless transactions across networks. Mitsubishi Corporation will be the first corporate user, employing the stablecoin for settlement within its extensive trading ecosystem.
These banks collectively maintain relationships with over 300,000 top corporate clients, which in turn, could help with stablecoin adoption in Japan. The project acts as a bridge between conventional banking and digital finance, where stablecoins act as efficient, blockchain-enabled payment tools.
Stablecoins: The New Face of Digital Payments
Unlike traditional currencies or paper money, stablecoins exist entirely in digital form. Their value is pegged to fiat currencies like the yen or the dollar, which facilitates stability even in volatile times. To maintain this peg, issuers hold real deposits or reserves that back each coin, that gives users confidence in its redemption value.
Japan’s megabanks believe stablecoins could revolutionize business-to-business (B2B) payments, enabling faster, cheaper, and round-the-clock settlements. Early pilot tests have already started that connect stablecoin systems to existing banking APIs and infrastructure to ensure smooth integration.
The project follows earlier groundwork laid by Project Pax, a joint research effort aimed at simplifying cross-border corporate payments through blockchain technology. That experience helped shape the framework now being introduced for Japan’s stablecoin ecosystem.
Regulated Innovation Strengthens Market Confidence
This initiative comes at a significant time for Japan’s financial modernization efforts. Authorities have encouraged banks to explore digital asset solutions within a regulated framework, enabling compliance with anti-money laundering (AML) and consumer protection laws.
By moving under strict oversight, these institutions hope to set a new standard for transparency and trust in digital payments. Analysts say Japan’s approach could position it as a global leader in regulated stablecoins, linking the reliability of fiat money with the efficiency of blockchain networks.
The collaboration is also expected to reduce transaction fees and shorten settlement times, helping businesses manage liquidity more effectively. With 24/7 operability and instant transfers, stablecoins could eventually become the backbone of Japan’s digital economy.
MUFG’s trust arm has gone a step further, exploring permissionless stablecoins for use in international trade, particularly in emerging markets. This move could expand Japan’s influence in the growing market for G7-backed digital currencies.
Global Banks Follow Suit
Japan isn’t alone in this movement. In Europe, ODDO BHF, one of France’s oldest banking institutions, recently unveiled EUROD, a euro-backed stablecoin designed to comply with the EU’s MiCA regulation. EUROD is aimed at both retail and institutional users who want a safe, low-volatility entry into blockchain-based finance.
Meanwhile, ten major global banks, including Bank of America, Deutsche Bank, Goldman Sachs, and UBS, are reportedly exploring a joint stablecoin initiative. The movement highlights a growing global recognition that regulated digital tokens could play a central role in the next generation of financial systems.
Instead of these developments, Tether (USDT) continues to dominate the stablecoin market, with a circulating supply of around $112 billion. This figure represents about 68% of total stablecoin capitalization as of mid-2025. Yet the arrival of major banking players could reshape that landscape in the years to come.
Market Reaction
Following the announcement, Mitsubishi Corporation’s stock showed mild optimism. Shares closed at ¥3,569, up ¥8 (0.22%) on October 17, with a trading range between ¥3,540 and ¥3,582. The company’s market capitalization stood at ¥14.38 trillion, with a P/E ratio of 17.79 and a dividend yield of 2.8%.
Also Read: Robinhood CEO Tenev: Stablecoins and Tokenized Stocks Will Redefine U.S. Assets
