Japan's Three Megabanks Complete Yen Stablecoin Pilot Targeting Fiscal 2026 Launch

Update 14:45 UTC: MUFG, Mizuho and SMBC joined the SBI Ripple Asia consortium in 2017 to run RippleNet for domestic and cross-border payments, and Mizuho and SMBC's investment arm have since signed direct agreements with Ripple Labs for real-world asset tokenization and institutional DeFi work on the XRP Ledger.

Yen Stablecoin Pilot Ran July 17-23

Mizuho Bank, MUFG Bank and Sumitomo Mitsui Banking, together with Mitsubishi UFJ Trust and Banking and system integrator TISI, announced on Oct. 16 that a joint proof of concept on yen-denominated stablecoin issuance has been completed. The five companies said the trial confirmed that a model in which several banks issue a single token together is practical. The work runs under a program Japan's Financial Services Agency selected in November 2025 as a supported project of its Fintech Proof-of-Experiment Hub and Payment Advancement Project (PIP), an initiative for testing advanced payment infrastructure with regulated institutions. The pilot itself was carried out from July 17 to July 23, 2026. The legal wrapper is a trust: the three commercial banks served as joint settlers under a trust agreement, with Mitsubishi UFJ Trust and Banking acting as trustee, and the stablecoin was issued in the form of “specified trust beneficiary rights” as defined by Japan's Payment Services Act. That places the token inside a regulated structure the law already recognizes rather than creating a new category. For the payment use case, the participants modeled settlement between Mitsubishi Corporation's sites in Japan and its overseas locations, running the full sequence from issuance through transfer to redemption back into cash. Verification items included how operations should be run when more than one bank acts as settler, anti-money-laundering and counter-terrorist financing controls (AML/CFT) fitted to each use case, and the effectiveness of the system itself. All five participants said the exercise produced working knowledge they intend to carry into commercialization.

TISI Rails and the Fiscal 2026 Target

The systems behind the trial came from TISI. Sumitomo Mitsui Banking had commissioned the vendor to build the blockchain platform and then provided it to every participant, and TISI deployed both the stablecoin issuance system and the wallet systems the pilot depended on. Beyond the settler-bank operations, AML/CFT checks and platform effectiveness already described, the companies verified regulatory handling shaped around each settler bank's own service design, along with the user-protection measures required of the trustee trust bank. In their assessment, the trial delivered practical knowledge on issuance and circulation and confirmed the safety and reliability of the systems involved. What the announcement does not spell out is scale: no circulating supply figure for the pilot tokens, no transaction volumes and no dapp integrations are given, with the release describing issuance and wallet infrastructure only. The commercialization path was set out earlier. On June 10, the three megabanks had already stated their aim of starting actual transactions within fiscal 2026 and reached a basic agreement to establish a council that would jointly examine operations and governance. Governance of a jointly issued token, rather than a single-issuer one, is precisely the part that council is meant to settle. For actual service, the companies are weighing a design that uses deposits as backing assets and limits circulation to users who complete identity verification at a bank, though they caution that this is a current assumption that could still change. With the pilot closed, the group says it will use the findings to organize the remaining issues and continue work toward real-world adoption.

The deposit-backed, identity-gated design on the table reads less like a public-chain token than tokenized deposits, closer in construction to a bank liability than to a yield-bearing stablecoin that pays holders directly. The trust wrapper is doing the compliance work: by issuing specified trust beneficiary rights, the banks keep the asset inside the existing Payment Services Act perimeter instead of arguing for new law. A permissioned, council-governed rail departs from the permissionless ethos tied to Bitcoin maximalism, but it is the version of on-chain settlement that Japanese bank compliance departments can actually approve. The date that matters next is the fiscal 2026 window for live transactions, pending the council's governance decisions.

The same group has been running parallel on-chain trials beyond the stablecoin work. On Feb. 13, the megabank-affiliated institutions announced a proof of concept covering the trading and rights transfer of traditional assets, and on Sept. 29 they disclosed a separate trial that used the trade finance platform TradeWaltz to test trade settlement. Under the Payment Services Act, the jointly issued token sits in the electronic payment means category, a distinct legal treatment from crypto assets, with the trust bank holding the backing assets as trustee and the beneficiary rights transferred electronically. The companies say they will keep working toward putting deposits and other financial assets on-chain as part of bringing on-chain finance into practical use, with payment and remittance demand as the stated focus of the design.

The same-day reporting round also touched the wider rail the token could plug into. SBI, the parent of domestic exchange operator SBI VC Trade, and Web3 firm Startale said they are joining Open Standard, and the two plan a verification effort on interoperability between the yen stablecoin JPYSC and the OUSD token, a step that would connect the megabanks' jointly issued token with an outside issuance framework. The banks' side of the picture is unchanged: the pilot, run July 17–23, confirmed the joint-issuance model, while the institutions have yet to put the token into commercial use and continue to target actual transactions within fiscal 2026.

The announcement sits against a long backdrop of Ripple ties among the same three banks. MUFG, Mizuho and SMBC joined the SBI Ripple Asia consortium in 2017 to run RippleNet for domestic and cross-border payments, and Mizuho and SMBC's investment arm have since signed direct agreements with Ripple Labs for real-world asset tokenization and institutional DeFi work on the XRP Ledger. Ripple itself goes unmentioned in the consortium's documents, but the joint token's design, issued through the Progmat platform MUFG built on Avalanche, reads as a way to keep compliance and fee control inside the banking group rather than route through external bridges like XRP. The possible outcome is a split market: closed bank rails for corporate B2B transfers, while SBI Holdings' regulated RLUSD and XRP liquidity retain cross-border retail use.

One additional detail from the same-day reporting round: on Sept. 29, the Financial Services Agency decided to back a separate experiment that applies stablecoins to trade settlement, a project involving six companies including Mizuho and distinct from the megabanks' cross-border payment trial. The FSA support places that second program under the same regulatory testing framework the yen stablecoin pilot ran in, with the two treated as different projects. The consortium's release also leaves one technical point open: while TIS built the blockchain platform and deployed the issuance and wallet systems, the companies did not disclose which chain underlies the token.