Japanese Banking Titans Launch Stablecoins to Compete with USDT and USDC

Japan's top three banks—Mitsubishi UFJ Bank, Sumitomo Mitsui, and Mizuho—are collaborating to create stablecoins pegged to the Japanese yen and US dollar. This initiative aims to compete with existing dollar-backed stablecoins, USDT and USDC. The yen-pegged stablecoin will initially support settlements for Mitsubishi Corporation, reflecting a strong push for stablecoin adoption in Japan's financial landscape.

Key Takeaways

Major Japanese banks are launching stablecoins pegged to the yen and dollar to challenge USDT and USDC dominance.
Mitsubishi UFJ Bank, Sumitomo Mitsui, and Mizuho aim to drive stablecoin adoption among corporate clients.
A new entity called Progmat will oversee the issuance and governance of these stablecoins.
Japan's recent regulatory changes have boosted its cryptocurrency adoption, with a notable 120% increase recorded last year.
The first yen-denominated stablecoin, named JPYC, is set to launch within the next three years.

Japanese Banks Collaborate to Launch Stablecoins

Three of Japan's foremost banks—Mitsubishi UFJ Bank, Sumitomo Mitsui, and Mizuho—are preparing to launch stablecoins tied to the Japanese yen and US dollar. This strategic move is designed to challenge the current dominance held by dollar-backed stablecoins such as USDT (Tether) and USDC (USD Coin). According to a report from Nikkei on October 17, the yen-backed stablecoin will initially be utilized for transactions by Mitsubishi Corporation.

These three massive banks, which cater to over 300,000 significant business partners, aim to facilitate broader stablecoin adoption across Japan.

🇯🇵 Japanese banks will soon issue stablecoins for commercial purposes. Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho Bank are teaming up for the release.

Likewise, SBI Holdings plans to integrate Ripple's $RLUSD into their services by the first quarter of 2026.
[Source: Nikkei News]

“The banks plan to develop a framework that allows stablecoin transfers between corporate clients according to uniform standards. Their initial issuance will feature a yen-pegged coin, with a dollar-pegged version potentially coming later on,” the Nikkei report stated.

Progmat: The Backbone of Japan’s Stablecoin Initiative

Earlier coverage by CryptoNews highlighted this initiative when Mitsubishi UFJ Trust and Banking announced its plans to launch Japan's premier fiat-pegged stablecoin. Central to this development is Progmat, a blockchain infrastructure firm initiated by MUFG (Mitsubishi UFJ Financial Group).

Progmat focuses on creating digital financial products that comply with regulatory standards. This platform will manage the issuance and governance of the new stablecoin, ensuring to adhere to legal and operational regulations.

In addition to Progmat, these banks have joined forces with various players in the crypto sector, including the local exchange Bitbank, blockchain innovator Avalabs, and crypto infrastructure provider Fireblocks.

This initiative coincides with prior reports indicating that Japan was gearing up to sanction its first yen-denominated stablecoin later this autumn. CryptoNews later confirmed that Tokyo-based fintech company JPYC would spearhead this launch. The JPYC stablecoin will maintain its peg to the yen through reserves of highly liquid assets, such as government bonds and deposits.

Potential uses for the yen-backed stablecoin include sending money to students studying abroad, facilitating cross-border corporate transactions, and enabling access to decentralized finance (DeFi) opportunities.

Source: X

Over the next three years, the banks are looking to issue stablecoins worth 1 trillion yen, roughly equivalent to $6.64 billion at the current exchange rate of 150.42 yen per dollar. This initiative aligns with the rising interest in stablecoins globally, with total market capitalization surpassing $307 billion, where USDC and USDT dominate.

At present, only Circle’s USDC has received approval as a dollar stablecoin in Japan. USDC was introduced in the Japanese market after Circle partnered with the financial conglomerate SBI Group in March to feature the token on the SBI VC Trade crypto exchange. Jeremy Allaire, CEO of Circle, acknowledged Japan's supportive environment for cryptocurrency in an X post, stating: “We have spent over two years engaging with Japan’s regulators and key industry players to launch USDC in the Japanese market.”

Japan's Commitment to Cryptocurrency Adoption

Japan's revamped legal framework, which took effect in June 2023, indicates a clear intention to expand on its engagement with digital currencies. The new regulations classify stablecoins as "currency-denominated assets," allowing them to be issued strictly by banks, trust companies, and registered money transfer businesses.

These regulatory changes have contributed to a dramatic increase in Japan's crypto adoption, which has surged by over 120% in the past year, according to the crypto analytics firm Chainalysis.

🎙️ In an exclusive interview, Chengyi Ong, Head of Public Policy for APAC at Chainalysis, discusses how the East is establishing a unique and sustainable path for digital assets, providing an alternative to Western dominance.

Among the top five markets in the Asia-Pacific region, Japan has witnessed the quickest growth, with its on-chain value received surging by 120% year-over-year as of June, per insights from Chainalysis' 2025 report debuted in September.

In the year ending June 2025, cryptocurrency purchases made using JPY stablecoins primarily went towards XRP, which garnered $21.7 billion in fiat trading activity, followed by BTC (Bitcoin) with $9.6 billion and ETH (Ethereum) with $4.0 billion.

Source: Chainalysis

The noteworthy dominance of XRP trading suggests investors may be banking on the practical applications of XRP, especially following Ripple's strategic collaboration with SBI Holdings.