Japanese Mega Banks Wrap Up Yen Stablecoin Pilot
The pilot tested issuance, transfer, and redemption under Japan's Payment Services Act, with Mitsubishi Corporation as the cross-border use case. AML and CTF checks were also a key part of the test.
Key Takeaways
- Mizuho, MUFG, and SMBC have completed their joint yen stablecoin pilot after a July test for cross-border payments.
- The trial used one yen token, issued under the Payment Services Act, and tested issuance, transfer, and redemption for cash.
- The banks want to carry out real transactions in fiscal 2026; the test also included AML and CTF checks.
Japanese mega banks Mizuho, MUFG, and SMBC have wrapped up their joint yen stablecoin pilot. The test ran in July and focused on cross-border payments. The banks want to carry out real transactions in fiscal 2026, marking another step for this project toward bank-issued digital money.
Pilot With a Joint Token
Three major banks and two partners took part in the trial. Together, they issued one yen token and tested the process from start to finish. Mitsubishi UFJ Trust and Banking acted as trustee, and TISI Inc. provided the technology.
The tokens were issued under Japan's Payment Services Act. Only KYC-verified users at participating banks could join. The issuance had no cap and was backed by bank deposits. According to the parties involved, that made it possible to test not just issuance, but also transfer and redemption for cash.
What the Test Showed
The main use case was settlement between Mitsubishi Corporation's headquarters in Japan and its overseas offices. That tested the full chain of issuance, transfer, and redemption. The banks say the trial showed that joint issuance can be safe, reliable, and operationally workable.
Compliance also played a big role. The test included checks around anti-money laundering and counter-terrorist financing. That matters because the three banks had not carried out live transactions before this pilot was completed.
Why This Matters
Japan's Financial Services Agency has long supported fintech projects through the Payment Innovation Project. That program is meant to test new payment infrastructure with regulated parties. This pilot fits into that broader effort and shows that traditional financial institutions are increasingly using blockchain for payment use cases.
For European crypto readers, the big takeaway is that bank-issued stablecoins are no longer just a theoretical idea. While China and the EU have been experimenting with digital currencies for years, Japan is now more clearly looking for a model where banks themselves can issue and settle digital tokens. Major banks in Europe are also working on similar payment infrastructure; British banks recently tested tokenized deposits as an alternative to stablecoins in an interbank pilot.
