Japan’s FSA Greenlights Game-Changing Yen-Backed Stablecoin Pilot – Mega Banks Jump In

Japan’s Financial Services Agency (FSA) just dropped a bombshell—approving a yen-backed stablecoin pilot with three banking giants onboard. This isn’t just another crypto experiment; it’s a direct shot across the bow of decentralized finance. And yes, the irony of traditional banks embracing stablecoins isn’t lost on us.

Why now? With global regulators tightening screws on crypto, Japan’s move screams strategic positioning. The FSA isn’t just dipping toes—it’s diving headfirst into blockchain’s deep end. Expect fireworks as these megabanks pivot from skeptics to stakeholders overnight.

But let’s not pop champagne yet. Remember when banks promised blockchain would revolutionize everything? Exactly. Still, this pilot could be the rare case where legacy finance actually gets crypto right—or at least fails spectacularly trying.

Three Major Banks Develop Shared Framework for Stablecoin Issuance

Three of Japan’s largest banks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group, are working on a joint project to issue yen-backed stablecoins for Japanese users.

Cryptonews reported last month that the lenders would promote settlements made with pegged cryptocurrencies. The MOVE aims to challenge the dominance of dollar-backed USDT and USDC stablecoins.

“The banks will build a structure for corporate clients to allow for stablecoins to be transferred between them along uniform standards, initially issuing a yen-pegged coin and potentially a dollar-pegged coin in the future,” Nikkei reported.

However, there has been no official joint statement from the banks involved.

In addition to the three major banks, Mitsubishi Corporation will serve as a business company, while Progmat will provide the issuance infrastructure. Besides, Mitsubishi UFJ Trust and Banking Corporation is expected to handle trust functions.

The experiment is expected to start “from November 2025 for the foreseeable future.” Full-scale efforts will begin toward practical application within this fiscal year.

The FSA said that the initiative “must be recognized as an innovative” effort.

Japan Ramps Up Stablecoin Launch

Last week, Japanese crypto exchanges and blockchain firms announced its intention to start “self-regulating” stablecoins. The body, named Japan VIRTUAL Currency Exchange Association (JVCEA), has been formalized by the FSA.

Meanwhile, Japan launched its first yen-backed stablecoin last month, dubbed JPYC. The fully convertible yen stablecoin is backed by domestic bank deposits and Japanese government bonds.