Japan Launches Stablecoin Pilot with Major Banks

Japan’s Financial Services Agency (FSA) has officially endorsed a joint pilot project focused on developing a stablecoin, led by the country’s three largest banks — Mizuho Bank, MUFG, and SMBC. The initiative aims to explore how different banking groups can collaboratively issue stablecoins recognized in Japan as “electronic payment instruments.”

The project seeks to determine whether such a system can operate in compliance with Japan’s existing financial regulations and security standards. The FSA emphasized that the initiative is experimental and designed to help establish how stablecoins can be legally and effectively integrated into the nation’s payment infrastructure.

The collaboration is also supported by Mitsubishi Corporation, Progmat Inc., and Mitsubishi UFJ Trust and Banking Corporation. The pilot will not only test the technical aspects of issuing and settling stablecoins but will also analyze the legal and regulatory implications of such operations.

The pilot program will launch in November 2025 and will run indefinitely. Results — including assessments of legal compliance and operational best practices — will be published on the FSA’s official website.

This marks the first project under the newly established Payment Innovation Project (PIP), created by the FSA to promote blockchain-based payment innovations. PIP operates within the existing FinTech Proof-of-Concept Hub, which has supported the testing of new financial technologies since 2017.

According to industry observers, the initiative represents an important step toward modernizing Japan’s financial infrastructure. It is expected to enable faster, more efficient digital transactions between institutions and strengthen Japan’s position as a global leader in financial innovation.