Japan’s Banking Giants Secure Regulatory Green Light for Groundbreaking Stablecoin Alliance

Tokyo shakes up finance as megabanks join forces on stablecoin gambit.

Three of Japan's largest financial institutions—Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho—just cleared the final regulatory hurdle for their blockchain-powered stablecoin project. The Financial Services Agency (FSA) approval signals a seismic shift in traditional finance's approach to digital assets.

Why this matters:

- First-ever joint stablecoin initiative by legacy banks of this scale

- JPY-pegged tokens aim to bridge crypto and traditional markets

- Comes just months after Japan's updated Payment Services Act took effect

The banks promise 'institutional-grade' stablecoins—which, in banking speak, means they'll move at blockchain speeds unless committee approval is required. Projected launch window: Q1 2026.

One banking exec anonymously quipped: 'We're either pioneering the future or building a very expensive bridge to nowhere.' Welcome to finance innovation, Japanese-style—slow, methodical, and suddenly ahead of the curve.

Mitsubishi UFJ, Mizuho, & Sumitomo Mitsui To Jointly Issue Stablecoins

As announced in a press release by MUFG bank, its banking group, along with two other major financial institutions, has just received approval from Japan’s Financial Services Agency (FSA) on a stablecoins proof-of-concept.

According to the press release, the banks’ project will involve joint stablecoin issuance and advanced cross-border payments, with both set to receive support from the FSA. Digital asset platform Progmat, founded by Mitsubishi UFJ, will provide the infrastructure and technological support for the proof-of-concept. “The three banks considering joint issuance will define requirements and establish evaluation criteria to build a concrete structure,” said MUFG.

A stablecoin is a cryptocurrency that has its price pegged to a fiat currency. Currently, the most popular assets of this type are tied to the US dollar (USD). The three big banks are expected to issue a stablecoin backed by the Japanese yen (JPY).

Last month, Japanese startup JPYC launched the nation’s first yen-based stablecoin, as reported by Bitcoinist. The token, called “JPYC,” is backed by domestic deposits and Japanese government bonds. For now, the company is offering 0% fees on issuance and redemption of JPYC to promote adoption.

MUFG’s press release noted that blockchain-based payments and use of tokenized deposits and stablecoins are being explored both domestically and overseas. So this proof-of-concept from the banks will serve as a testing ground to accumulate practical knowledge related to joint stablecoin issuance.

Elsewhere in Asia, Hong Kong approved its legislature on these fiat-tied tokens earlier this year, and big names like Standard Chartered in its joint venture are on the waiting list for an issuer license.

The first batch of approvals was earlier expected to drop next year, but a recent Financial Times report has revealed that mainland regulators have urged applicants to pause their plans, due to concerns about the growth of currencies controlled by the private sector.

Over in Europe, a consortium of big banks has come together to launch a euro stablecoin in the second half of 2026. Initially, the consortium included nine European banks, but later a tenth financial institution in the American Citigroup joined the effort.

The euro-pegged token, which aims to be fully compliant with the European Union’s Markets in Crypto-Assets Regulation (MiCAR), seeks to provide a real alternative to the USD-heavy stablecoin market.

Bitcoin Price

Bitcoin has been facing bearish pressure recently, which has taken its price to the $100,000 level, down over 8% on the weekly timeframe.

Earlier in the week, Bitcoin saw a recovery surge above $104,000. This rally interestingly occurred alongside notable stablecoin exchange inflows, as pointed out by an analyst in a CryptoQuant Quicktake post. It’s possible that investors made these deposits to convert their stables for BTC and other volatile assets, but considering the latest price trend, the buying pressure didn’t last.