Japan’s Banks Unveil Yen Stablecoin Pilot Blueprint for Cross-Border Payments
Key Summary
Japan's three megabanks, Mizuho, MUFG, and SMBC, have completed a joint yen stablecoin pilot for cross-border payments, marking a significant step towards implementing real transactions in fiscal 2026. The pilot, which tested the full cycle of issuance, transfer, and redemption, confirmed the safety, reliability, and operational viability of joint issuance, and provided practical insight into systems and operations.
Background
Japan's three megabanks, Mizuho, MUFG, and SMBC, announced on October 16 that they completed a joint yen stablecoin pilot for cross-border payments, conducted in July.
Pilot Project
The test points to a new model for bank-issued digital money, with real transactions targeted for fiscal 2026.
How the Pilot Worked
Three major Japanese megabanks and two partners took part in the pilot project. The banks issued one shared yen token, which the group tested end to end.
Key Partners
Mitsubishi UFJ Trust and Banking acted as trustee, while technology firm TISI Inc. joined as the technology provider. The tokens were issued under Japan's Payment Services Act, and the three banks acted as joint settlors. Circulation was limited to KYC-verified users at participating banks and had no cap, while bank deposits backed the tokens.
Pilot Findings
The pilot's main use case was cross-border settlement between Japanese headquarters and the overseas offices of Mitsubishi Corporation. Cross-border settlement means finalizing payments between parties in different countries. Redemption means returning tokens for cash. The pilot verified the full cycle: issuance, transfer, and redemption. Results confirmed the safety, reliability, and operational viability of joint issuance. Participants gained practical insight into systems and operations. Compliance work also covered anti-money laundering and counter-terrorist financing measures.
Industry Impact
The result is a workable template for banks exploring digital money. Live transactions remain the next milestone for the project. The Financial Services Agency-backed project was selected in November 2025 under its FinTech PoC Hub and Payment Innovation Project. SMBC provided the blockchain platform, which TISI built. In June, the banks announced a joint council to study governance and operations. Fiscal 2026, the target year for real transactions, runs from April 2026 to March 2027.