Japan's Three Largest Banks Join Forces to Issue a Yen-Linked Stablecoin by the End of 2025

Japan's financial establishment is making its boldest move towards digital coins, with the country's three largest banks coming together to issue a unified stablecoin linked to the yen that could transform corporate payments in Asia's second-largest economy.

Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Bank plan to launch the joint stablecoin by the end of 2025, according to a Friday report from the Japanese business newspaper Nikkei.

The initiative will leverage MUFG's Progmat Coin platform, a blockchain infrastructure specifically designed for the issuance of regulated stablecoins.

A Unified Digital Coin for Corporate Japan

The ambitions of the consortium go beyond simply issuing another digital token. The three megabanks, which collectively serve over 300,000 corporate clients, seek to create standardized tokens that can be used in an interoperable manner for both intra-company and inter-company payments.

This standardization could be transformative for Japanese businesses, potentially reducing transaction costs and settlement times while modernizing the payment infrastructure that has long relied on traditional banking channels.

Mitsubishi Corporation, the extensive trading house with over 240 subsidiaries around the world, will be the first entity to implement the stablecoin for internal settlements. The company plans to use the digital coin to streamline international dividend transfers, acquisitions, and transactions with clients - potentially saving millions in fees and administrative costs.

If successful, the project could establish the first bank-backed stablecoin network in Japan under a unified framework, setting a precedent for how traditional financial institutions can adopt blockchain technology while remaining compliant with regulations.

Built on Multi-Blockchain Infrastructure

The technical foundation of this ambitious project rests on Progmat Coin, MUFG's stablecoin issuance platform that officially launched in early 2025. The platform enables the implementation of stablecoins across multiple public blockchains, including Ethereum, Polygon, Avalanche, and Cosmos, with plans for expansion to additional networks.

This multi-chain approach addresses a critical challenge in blockchain technology: interoperability. By enabling seamless transfers between different blockchain ecosystems, Progmat Coin aims to avoid the fragmentation that has plagued previous digital coin initiatives.

“The basic architecture involves financial institutions interested in issuing stablecoins by depositing an equivalent amount of fiat currency with MUFG's trust bank,” said Motoki Yoshida, marketing manager at TOKI. “Progmat then issues an equivalent amount of stablecoins. The funds in the trust bank are protected against bankruptcies, making this potentially the safest stablecoin for use on public blockchains.”

The platform operates under Japan's revised Payment Services Act, which came into effect in June 2023. Under this framework, stablecoins must be backed 100% by liquid assets such as bank deposits or government bonds, with monthly third-party audits ensuring transparency. “It is an important step towards the future of digital finance. This project aims to address the issue of cross-border payments.”

The collaboration also highlights the growing importance of technological innovation in Japan's financial sector. By providing a secure and scalable platform, Progmat enables participating banks to create a digital coin solution that meets global standards while fulfilling regulatory obligations.

As global finance increasingly adopts digital monedas, Japan's coordinated approach, which combines regulatory clarity, institutional backing, and technological infrastructure, positions the nation as a potential leader in the next phase of financial innovation. The success or failure of this consortium of megabanks could influence how other developed economies approach the integration of blockchain technology into conventional finance.

The coming months will reveal whether Japan's banking giants can meet their ambitious timeline and create a stablecoin ecosystem that truly connects traditional finance with the digital economy.