Japan’s three megabanks, Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation (SMBC), have successfully completed a joint test of a yen-pegged stablecoin. The project also involved Mitsubishi UFJ Trust and Banking Corporation.
Conducted from July 17 to July 23, 2026, the pilot simulated domestic and cross-border payments between Mitsubishi Corporation’s operations in Japan and its overseas branches.
Three of Japan’s banking giants, MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corporation, have announced the successful completion of a joint yen-backed stablecoin pilot.
The project involved Mitsubishi UFJ Trust Bank, technology provider TISI and Mitsubishi Corporation.
The banks tested stablecoin issuance, transfers and redemption for cross-border corporate payments between Mitsubishi Corporation’s Japanese and overseas operations.
SMBC provided the blockchain infrastructure developed by TISI.
— Cypress Demanincor (@CDemanincor) October 16, 2026
The project used a trust-based issuance structure supported by the Financial Services Agency’s FinTech Experimental Hub. Under Japanese law, the token is classified as an electronic payment instrument.
The banks are targeting live commercial transactions during fiscal year 2026, with a potential launch by March 2027. If introduced, the system could reduce the cost and time required to settle international corporate payments.
READ ALSO: SBI and Startale Launch Japan’s First Trust Bank-Backed Yen Stablecoin JPYSC
Japan Megabanks may face settlement challenges
Creating a shared settlement system requires Japan’s competing banks to overcome major operational challenges. X user Been noted that getting support from the Financial Services Agency for the joint pilot is an important first step towards building a permanent settlement network.
@CoinDesk @mizuhobank @mufgbk_official @smbc_midosuke This is a bigger deal than a single test: Japan’s FSA directly backing a joint pilot between all three megabanks is how settlement rails get built. Cross-border payments have long been the slowest, most expensive corridor in traditional finance.
— Ppppp (@been60876586) October 16, 2026
However, creating a digital version of the yen only addresses fund transfers. Another X user, Oldman, pointed out that issuing the token is the easiest part of the process. Determining which bank is legally responsible for the token when customers hold it and how the three competing banks will settle their balances with one another will be the challenge.
@Cointelegraph The token is the easy part here 👀 three competing banks issuing jointly still have to settle whose liability the coin is and how they net against each other, and a corporate cross-border payment waits on the FX and compliance leg at each end, not on the transfer leg 🙌
— Oldman Crypto (@OldmanScalping) October 16, 2026
Corporate cross-border payments must also go through foreign exchange conversions and strict compliance checks in both the sending and receiving countries.
Although blockchain can speed up the transfer of transaction data, resolving local regulatory requirements and establishing sufficient liquidity pools will determine how quickly international payments can be completed.
Japan’s efforts to integrate blockchain technology extend beyond stablecoin payments
In September 2026, the Financial Services Agency selected a project involving Mizuho Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation, Mitsubishi UFJ Trust and Banking Corporation, TradeWaltz, and NTT DATA. The project aims to connect electronic trade documents with stablecoin payments, reducing the paperwork and verification processes involved in international trade.
Japan is also exploring tokenized bank deposits. In April 2026, the Financial Services Agency announced support for a project examining how customers of different banks could transfer tokenized deposits and settle transactions between financial institutions. These initiatives show that Japan is looking at different ways to apply blockchain technology to traditional banking and international trade.
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