Japan’s three megabanks, Mizuho, MUFG and SMBC, announced on October 16 that they completed a joint yen stablecoin pilot for cross-border payments, conducted in July.
The test points to a new model for bank-issued digital money, with real transactions targeted for fiscal 2026.
How the Yen Stablecoin Pilot Worked
Three major Japanese megabanks and two partners took part in the pilot project. The banks issued one shared yen token, which the group tested end to end.
The partners split the work across issuance, custody, and technology, and each firm was responsible for its own part of the process.
- The three participating megabanks conducted the pilot from July 17 to 23, 2026.
- Mitsubishi UFJ Trust and Banking acted as trustee, while technology firm TISI Inc. joined as the technology provider.
- The tokens were issued under Japan’s Payment Services Act, and the three banks acted as joint settlors.
- Circulation was limited to KYC-verified users at participating banks and had no cap, while bank deposits backed the tokens.
A trustee holds assets for others and must follow the trust’s terms. Trustees must act in the interest of beneficiaries. Beneficiaries are the people who hold rights under the trust.
Settlors create a trust and place assets into it. KYC, or know-your-customer, means banks verify each user’s identity before granting access.
What Did Japan’s Pilot Actually Prove?
The pilot’s main use case was cross-border settlement between Japanese headquarters and the overseas offices of Mitsubishi Corporation.
Cross-border settlement means finalizing payments between parties in different countries. Redemption means returning tokens for cash. The pilot verified the full cycle: issuance, transfer, and redemption.
Results confirmed the safety, reliability, and operational viability of joint issuance. Participants gained practical insight into systems and operations. Compliance work also covered anti-money laundering and counter-terrorist financing measures.
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Those findings matter because the banks had not yet run any live transactions. For the wider industry, the result is a workable template for banks exploring digital money. Live transactions remain the next milestone for the project.
The Financial Services Agency-backed project was selected in November 2025 under its FinTech PoC Hub and Payment Innovation Project. SMBC provided the blockchain platform, which TISI built.
In June, the banks announced a joint council to study governance and operations. Fiscal 2026, the target year for real transactions, runs from April 2026 to March 2027.
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