MUFG Bank, Sumitomo Mitsui Banking Corp., and Mizuho Bank will collaborate on a stablecoin issuance, Nikkei reported, marking a collective bet by Japan’s banking establishment on blockchain-based settlements.
The lenders will leverage Progmat, a Tokyo-based fintech company, to build the infrastructure for their digital currency project. The initiative will start with a yen-pegged token, though a dollar-denominated version may follow.
The three institutions collectively serve more than 300,000 corporate clients and aim to establish common technical standards that would allow the stablecoin to function across their networks. Mitsubishi Corp. will serve as the first adopter, using the token for cross-border payments among its global subsidiaries.
The move reflects Japan’s regulatory environment, which since June 2023 has permitted only licensed banks, trust companies, and registered money transfer operators to issue stablecoins. While the banks position the project as a way to reduce remittance fees and streamline settlements, questions remain about adoption timelines and whether corporate clients will embrace yet another payment rail.
Japan faces competition from neighboring markets including Hong Kong and Singapore, which have also advanced digital currency frameworks. The success of the joint venture will depend on whether the banks can demonstrate meaningful cost savings beyond what existing payment systems already provide.
