Japan FSA Backs Major Banks in Yen-Pegged Stablecoin Pilot
Japan’s Financial Services Agency (FSA) has greenlighted a proof-of-concept for a yen-pegged stablecoin issued by Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMBC) and Mizuho Financial Group (MFG). Starting this month and running indefinitely under the revised Payment Services Act, the pilot will test cross-border payments with a 1:1 yen redemption ratio and explore a potential dollar-backed variant.
The move follows the October launch of JPYC, Japan’s first yen stablecoin, and precedes planned rollouts of SBI and Ripple’s RLUSD in early 2026 and Japan Post Bank’s DCJPY by fiscal 2026.
Backed by the Bank of Japan, the initiative aims to improve transaction speed, cut costs and boost transparency. Regulatory clarity from the FSA could drive wider stablecoin adoption in retail, corporate and trade-finance markets.
Bullish
Regulatory backing from the FSA and the Bank of Japan reduces compliance risk and signals strong institutional support for stablecoin innovation. The pilot’s focus on cross-border payments and a 1:1 yen peg enhances operational credibility. In the short term, this could boost liquidity and trading activity in yen-pegged stablecoins. Over the long term, growing regulatory clarity and bank adoption are likely to expand use cases in retail, corporate finance and trade finance, reinforcing stablecoin demand and market growth.