Japan’s MUFG, Mizuho and SMBC finish first joint yen stablecoin test

MUFG, Mizuho and Sumitomo Mitsui Banking Corporation have finished the first joint trial of a yen stablecoin that the three banks would issue together for cross-border payments, the lenders announced on 16 October 2026, as Forexcrunch reported. MUFG said the closed exercise ran from 17 to 23 July 2026 inside a project overseen by Japan’s Financial Services Agency, and SMBC issued a matching announcement of the same result.

The test case was settlement between Mitsubishi Corporation’s Japanese headquarters and its overseas offices. Participants checked the whole sequence of issuing the token, moving it and redeeming it into fiat, and examined how several institutions coordinate when they issue jointly, including anti-money laundering and counter-terrorist financing rules.

Also read: Citi and Coinbase Launch Stablecoin-to-Dollar Conversion for US Institutions

Key facts

• MUFG, Mizuho and SMBC ran the closed trial from 17 to 23 July 2026 and announced the outcome on 16 October 2026.
• The project was selected in November 2025 under the FSA’s FinTech PoC Hub and Payment Innovation Project.
• The stablecoin is a specified trust beneficiary right under the Payment Services Act, backed by bank deposits, with Mitsubishi UFJ Trust and Banking Corporation as trustee and TISI Inc. as technology provider.
• Circulation in the pilot was limited to KYC-verified customers of the three banks, with no preset cap on supply, according to Cryptobriefing.
• Cryptobriefing reported that the three banks established the experiment’s framework and examined issuance and payment needs, while the trust bank assessed trustee operations and user safeguards and TISI integrated the blockchain issuance system and wallet infrastructure.

A bank-led rail under the Payment Services Act

Structurally, the arrangement differs from a market-driven dollar stablecoin. Three banks that dominate Japan’s banking system would act as joint settlors commissioning issuance, with deposits held in trust beneath the token. Crypto media outlet U.today framed the design as an attempt to build an in-house settlement route in which the banks keep control of compliance and fees inside the traditional banking vertical.

U.today noted that Ripple is not named in the consortium’s documents, but ties the story to the XRP Ledger because all three megabanks joined a SBI Ripple Asia-backed banking consortium in 2017 and have since signed agreements with Ripple Labs. The banks are also working through TradeWaltz on asset trading, ownership transfers and trade settlement, Forexcrunch reported. Forexcrunch first reported the plan in June 2026, when the banks announced a basic agreement and a joint council for governance and operations; Cryptobriefing independently dates that disclosure to June as well.

Also read: ESMA Sets January 8, 2027 Deadline to Clear Non-MiCA Stablecoins

Why it matters

No live transactions have run yet, so the immediate effect on currency or crypto markets is limited. The larger signal is regulatory: a deposit-backed yen token issued jointly by the biggest banks would sit inside a supervised perimeter rather than outside it. If the trust structure holds at commercial scale, it becomes a template other Japanese issuers could copy and a regulated rail for corporate yen flows across borders. For crypto users, the pilot’s closed, verified-customer design shows the banks are charting a path separate from open-token settlement, though U.today argued the two models could coexist rather than one displacing the other.

What to watch

The next stage covers governance, regulatory compliance, cybersecurity and system stability, and the banks have targeted real transactions within fiscal 2026, the Japanese year running April 2026 to March 2027. How the FSA treats the trust structure as it moves toward commercial use is the decision point to follow.

Written by

Emily Torres

Emily Torres covers cryptocurrency and decentralized finance for StockPil, tracking blockchain markets and regulatory developments.

Sources: ForexCrunch, Cryptobriefing, U.today