Japan’s three largest banking groups are preparing a stablecoin for the digital payments system.
JAKARTA – Japan’s three largest banking groups plan to jointly issue a stablecoin during the fiscal year ending March 2027.
As reported by Reuters, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group have agreed to establish a joint council to develop the operational framework and prepare for the issuance of the stablecoin.
The project has received support from Japan’s Financial Services Agency (FSA), which has been promoting the use of blockchain technology to improve the efficiency of the country’s payment system.
The initiative comes amid growing global attention on stablecoins. The digital assets, whose value is pegged to a specific currency, have gained increasing support from various quarters, including US President Donald Trump.
Nevertheless, a number of regulators and policymakers continue to highlight the potential risks of stablecoins, particularly concerns over the movement of funds outside the banking system overseen by regulators.
Japan has begun to make progress in stablecoin adoption. In October last year, local start-up JPYC launched a yen-backed stablecoin as an alternative digital payment method in a market still dominated by cash and credit cards.
The Japanese government has also continued to strengthen support for the use of yen-backed stablecoins. In a proposal released this month, a panel from the ruling party encouraged the use of yen stablecoins as a settlement instrument for transactions across Asia.
If realised, the issuance of a stablecoin by Japan’s three largest banks could become an important milestone in the transformation of the digital payments system in the world’s fourth-largest economy. (DH/ZH)
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