Japan's three largest financial institutions—Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMBC), and Mizuho Financial Group—have collaborated to issue a new stablecoin pegged to both the Japanese yen and the U.S. dollar, as reported by Nikkei on October 17, 2025. This initiative aims to streamline cross-border settlements and modernize Japan's digital payments infrastructure, with the stablecoin existing solely in digital form to enable faster, more efficient transactions while maintaining parity with fiat reserves.
The project will debut with Mitsubishi Corporation as the first use case, where the stablecoin will be applied in corporate fund settlements. Collectively, the three megabanks serve over 300,000 business clients, providing the venture with extensive reach across Japan's industrial and financial sectors. To ensure stability and regulatory compliance, the issuing institutions will hold equivalent assets in bank deposits, backing the coin's value.
At the core of this effort is Progmat, a blockchain infrastructure platform developed by MUFG, which will manage the stablecoin's issuance and governance. Progmat is designed to ensure adherence to all regulatory standards, adding a layer of trust and reliability. This collaboration represents a significant step in Japan's push toward a regulated digital currency ecosystem, potentially setting a model for traditional banks to integrate blockchain-based finance. It aligns with broader trends in Asia, as Japan joins countries like Hong Kong and South Korea in advancing crypto adoption, following the Financial Services Agency's (FSA) easing of stablecoin regulations.
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