Japan's Banks Unveil Stablecoin Framework for Cross-Border Payments
Key Summary
Japan's three major banking groups have successfully tested a jointly issued yen stablecoin for cross-border payments, validating the issuance and redemption process and the feasibility of a shared banking framework. The trial aimed to establish a basic agreement and coordinate the development of a fiat-pegged stablecoin targeted for fiscal 2026.
Japan's Megabank Trio Completes Joint Stablecoin Payment Test
Japan's three major banking groups have completed a trial of a jointly issued yen stablecoin for cross-border payments, validating the issuance and redemption process and the feasibility of a shared banking framework, according to a Friday press release.
Pilot Project and Joint Agreement
The three lenders first unveiled plans in June to formalize a basic agreement and establish a council to coordinate the development of a fiat-pegged stablecoin targeted for fiscal 2026. The initiative followed a pilot launched with Japan's Financial Services Agency in November 2025 and was part of a push by Japanese banks to develop blockchain-based payment infrastructure.
Trial Process
Under the proposed arrangement, the three banks jointly commission the issuance of the stablecoin, while Mitsubishi UFJ Trust and Banking Corporation acts as trustee. The stablecoin is structured as a specified trust beneficiary right under the Payment Services Act, with bank deposits serving as the underlying assets.
Trial Results
The trial ran from July 17 to 23, 2026, with Mitsubishi UFJ Bank, Mizuho Bank, and Sumitomo Mitsui Banking Corporation participating alongside Mitsubishi UFJ Trust and Banking Corporation and TISI.
Using payments between Mitsubishi Corporation's Japanese and overseas offices as a test case, the participants verified the stablecoin's issuance, transfer, and redemption processes and examined the associated regulatory and operational requirements.
Next Steps
The next stage will focus on resolving outstanding issues before commercial deployment, including governance, regulatory compliance, cybersecurity, and system stability. The three banks are also pursuing related blockchain projects involving traditional asset trading, ownership transfers, and trade settlement through TradeWaltz.
Conclusion
The banks said they would continue working with regulators, financial institutions, businesses, and technology providers to develop accessible digital payment services and support the adoption of on-chain deposits and other financial assets.