Japan’s three megabanks confirmed that one jointly issued yen stablecoin works in a controlled test. The pilot modeled cross-border treasury transfers for Mitsubishi Corporation. The banks di
Mizuho Bank, MUFG Bank and Sumitomo Mitsui Banking Corporation (SMBC) said on October 16 that a yen stablecoin pilot they ran between July 17 and 23 with Mitsubishi UFJ Trust and Banking and systems provider TISI confirmed that Japan’s three largest banks can jointly issue and operate a single digital token for corporate payments, keeping their plan for the first live transactions before March 2027 on schedule.
Japanese banks have experimented with digital money for years, yet each group usually built its own system, leaving corporate clients to deal with separate platforms depending on where they held accounts. The July test went straight at that fragmentation. The three megabanks acted as joint settlors under one trust agreement, so a token issued through any of them could in principle circulate among customers of all three. According to the joint statement, the participants examined the full life of the token, from issuance and transfer through to redemption, together with the compliance duties and blockchain security that a bank-grade payment instrument requires.
The shared model answers a basic commercial problem, since a stablecoin is only as useful as the number of counterparties willing to accept it and a token confined to one bank’s client base does little for a trading house whose suppliers bank elsewhere.
Legally, the token is a specified trust beneficiary right under Article 2(9) of Japan’s Payment Services Act. In plain terms, the holder owns a defined claim on assets held in trust, which gives it a firmer legal footing than a token backed only by an issuer’s promise. Mitsubishi UFJ Trust and Banking served as trustee, managing the underlying assets and handling redemptions, while the proposed structure keeps the underlying trust assets as deposits held at the banks. Users would pass bank identity checks before receiving the token, keeping circulation inside a known-customer perimeter.
The design carries no fixed circulation ceiling, which allows for large corporate balances in theory but says nothing about how much demand will actually appear. The banks also noted that parts of the structure may still change before launch. The infrastructure also changed along the way, since the November 2025 application named Progmat as the technology provider while the July test ran on a blockchain base that SMBC provided and TISI built.
Participant Role in the pilot Mizuho Bank Joint settlor, operations and regulatory work MUFG Bank Joint settlor, operations and regulatory work SMBC Joint settlor, blockchain infrastructure Mitsubishi UFJ Trust Trustee, asset management and redemption TISI Issuance systems and wallet technology Mitsubishi Corporation Cross-border corporate payments use caseSource: joint announcement, October 16, 2026
Mitsubishi Corporation, one of Japan’s largest trading houses, supplied the use case, with the pilot modeling transfers between its domestic entities and overseas operations. Multinationals move money between subsidiaries constantly to pay suppliers and fund overseas operations, and every leg of that journey can pass through different banks with their own cut-off times and compliance checks. A token that approved group companies send over shared infrastructure could remove part of that friction.
The limits are just as concrete, since a yen token still needs a currency conversion once the receiving subsidiary wants dollars or euros, and a fast on-chain transfer shortens final settlement only if redemption and compliance checks keep pace with it.
The announcement confirms feasibility without putting numbers on it, leaving out transaction volumes and measured cost savings, and the participants did not publish a contract address for the token. The results show that the legal and technical plumbing works under test conditions, while the commercial case still has to be proven with real payment flows.
The pilot is the latest public milestone in a project that the Financial Services Agency selected for its FinTech Proof-of-Concept Hub in November 2025, under the Payment Innovation Project. That selection gave the banks a supervised setting to work through legal questions, although it does not amount to blanket approval for unrestricted distribution. The legal footing goes back to June 2023, when amendments to the Payment Services Act opened a licensing path for fiat-linked stablecoins issued by banks, trust companies and other authorized entities.
Nov 2025 – FSA selects the project for its Payment Innovation Project Jun 10, 2026 – Banks sign a memorandum to form a joint council Jul 17-23, 2026 – Joint issuance and cross-border test Oct 16, 2026 – Results published, feasibility confirmed By Mar 2027 – Target for first live corporate transactionsMUFG is running a second track in parallel, and on September 2 it joined a group of 21 international banks, among them Bank of America, Citi, Goldman Sachs and Deutsche Bank, that plans to set up a stablecoin company. That venture starts with a US dollar token, may add the euro and other G7 currencies later, and aims for a launch in the first half of 2027, subject to the required conditions. Running both at once positions Japan’s largest lender for a market in which corporate clients hold tokenized yen at home and tokenized dollars abroad.
Three-bank yen token 21-bank consortium Currency Japanese yen US dollar first Issuers Mizuho, MUFG, SMBC Global banks incl. MUFG Target By March 2027 H1 2027 Focus Corporate cross-border payments Institutional payments and settlementSource: MUFG announcements
At home the field is getting crowded, with JPYC already issuing a yen-denominated payment token outside the bank structure, SBI Holdings distributing USDC through its partnership with Circle, and Progmat, the digital asset platform that grew out of Mitsubishi UFJ Trust and Banking, supplying tokenization infrastructure. Each differs in issuer, legal form and target users, so they compete for different slices of demand.
Over the next five months, the joint council formed in June becomes the working body. Its brief covers governance, issuance infrastructure and possible cooperation with other financial institutions, and the June release says the council will also look at how other financial institutions could join later. The October statement lists compliance, cybersecurity and operational stability as unfinished work. For corporate treasurers, the practical shift arrives with the first live transfers, when tokenized yen held at any of the three banks could move between group entities on a common ledger. For the wider market, a bank-issued yen token without a circulation cap would give Japanese institutions a regulated domestic option for on-chain settlement that does not depend on dollar stablecoins. The FSA also said in November 2025 that it would publish the pilot’s results and its legal conclusions once the experiment ended, which would give other Japanese issuers a reference point for joint structures.
The banks are already testing where such a token could plug in next. The October announcement references a February 13 experiment on blockchain-based trading and transfer of rights in traditional financial assets using digital money, along with a September 29 trade settlement test on TradeWaltz, a Japanese platform for digitizing trade documentation. Whether the shared yen token eventually links to those networks, or to tokenized currencies from other banking systems, is a question the banks have not yet answered publicly.
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