Japan's Big Banks Complete Yen Stablecoin Test, Target Real Use by 2026

On October 16, Mizuho, MUFG, and SMBC—Japan's three largest banking groups—reported the completion of a joint yen stablecoin pilot focused on cross-border payments, which was carried out in July.

The exercise points to a fresh approach for bank-issued digital currency, with actual transactions slated for fiscal 2026.

How the Yen Stablecoin Pilot Worked

The three megabanks, along with two partners, participated in the trial. A single yen token was issued jointly by the banks and tested across the entire process.

BREAKING: 🇯🇵 Japan’s three largest banks completed their first cross-border stablecoin payment test.

MASSIVE! 🚀

— Crypto Rover (@cryptorover) October 16, 2026

Duties were divided among the partners across issuance, custody, and technology, with each firm handling its own segment of the workflow.

• The three banks ran the pilot during the period of July 17–23, 2026.
• Mitsubishi UFJ Trust and Banking served as trustee, while TISI Inc. handled the technology side.
• Tokens came into circulation under Japan's Payment Services Act, with the trio of banks acting as joint settlors.
• Only KYC-verified customers at the participating banks could use the tokens, with no supply limit, and bank deposits backed them.

A trustee is an entity that holds assets on behalf of others and must adhere to the trust's conditions. Trustees are obligated to act in the interest of beneficiaries, who are the parties holding rights under the arrangement.

Settlors establish a trust and transfer assets into it. KYC, meaning know-your-customer, refers to the process by which banks confirm a user's identity before granting access.

What Did Japan’s Pilot Actually Prove?

The main scenario tested was cross-border settlement between Mitsubishi Corporation's headquarters in Japan and its overseas branches.

Cross-border settlement involves finalizing payments between parties in different nations. Redemption refers to exchanging tokens for cash. The pilot covered the entire loop: issuance, transfer, and redemption.

Outcomes affirmed the safety, reliability, and operational feasibility of the joint issuance model. Those involved gained hands-on knowledge of systems and operations. Compliance efforts also addressed anti-money laundering and counter-terrorist financing requirements.

This matters because the banks had not yet processed any real transactions. For the broader industry, the trial provides a functional blueprint for banks exploring digital currencies. Live transactions are the next step for the initiative.

The project, backed by the Financial Services Agency, was picked in November 2025 through its FinTech PoC Hub and Payment Innovation Project. SMBC supplied the blockchain platform, which TISI developed.

In June, the banks unveiled a joint council to examine governance and operations. Fiscal 2026, the target for real transactions, spans April 2026 to March 2027.