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Ahmed Barakat
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MUFG Bank, Mizuho Bank, and Sumitomo Mitsui Banking Corporation have established a joint council creating and including a yen-backed crypto stablecoin by the end of Japan’s fiscal year 2026, March 2027.
The stablecoin will be issued under a trust agreement, with all three banks acting as counterparties to the trust bank or similar entities acting as trustees. This is not a pilot. Three key strategic organizations have developed shared tools.
The project is working under the FSA’s Payment Innovation Project and follows a pilot in late 2025 assessing whether the joint issuance of many banks can be done, in the words of the banks, “legally and efficiently.”
Obviously, the answer was yes. Together, MUFG, Mizuho, and SMBC manage more than $7 trillion in assets, making this the largest Japanese stablecoin initiative in Asia to date.
Japan Payment Services Act: The Regulatory Architecture Behind the Consolidated Release
Japan’s stablecoin regulations took a turn for the worse in June 2023, when amendments to the Payment Services Act established a system for licensing stablecoins, classifying them as digital payment instruments.
The law prohibits domestic issuance in three categories of institutions: licensed banks, trust companies or trust banks, and providers of fund registration services. That restriction is a way to make megabanks go through it.
The FSA’s Payment Innovation Project, which is part of the FinTech Proof-of-Concept Hub that has been operating since 2017, has proposed a pilot scheme for late 2025.
The revised PSA 2026 came into effect on June 13, 2026, strengthening cross-border travel regulations and strengthening the FSA’s position. Starting June 1, 2026, foreign stablecoins may also operate in Japan as digital payment instruments under the Cabinet Office Ordinance, provided they provide FSA certification, collateral management, and accounting standards.
The investment rules are specific: trust stablecoin issuers can invest up to 50% in short-term Japanese government bonds. The megabank yen stablecoin is expected to be fully secured, backed by funds and JGBs of trust, meeting exactly the FSA’s requirements for asset allocation and redemption-at-par.
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Japanese Yen Crypto Stablecoin Field: JPYC, JPYSC, EJPY, and Now Megabanks
Megabanks are entering the yen stablecoin market which has been moving rapidly since 2023 clearly. JPYC Inc. launched Japan’s official yen stablecoin, JPYC, in October 2025.
The FSA later placed it under the payment systems managed by PayPay and Rakuten Pay in April 2026, which shows how the business has changed.
SBI Holdings and Startale Group were followed in February 2026 by JPYSC, a trust bank-backed yen stablecoin issued by SBI Shinsei Trust Bank and tracking cases of institutional and cross-border use.
The Japan Blockchain Foundation announced EJPY in May 2026, to be offered on the Japanese Open Chain and Ethereum.
On the dollar side, Major financial institutions are rushing to set up bank-issued crypto banksUSDC became the first dollar-pegged stablecoin approved in Japan in March 2025, issued by SBI, and Ripple and SBI Holdings announced plans to launch RLUSD in Japan.
What differentiates the megabank co-issuance model is the weight of regulation, not technology. JPYC and JPYSC are legal tenders. The yen stablecoin from all three major banks in Japan has the trustworthiness of various organizations, as well as the amount of money that can be invested.
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