Japan’s three biggest banks plan to issue a joint yen-backed stablecoin by the end of this financial year in March 2027, according to an announcement made this month. Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMBC), and Mizuho Financial Group will create a council to design the system and governance for what they are calling the “Subject Stablecoin.” The goal is to run actual commercial transactions using the digital token before the financial year ends. The three banks said the council will examine legal and regulatory requirements, market trends, and the overall framework needed for the stablecoin to operate. They’re working with Japan’s Financial Services Agency, which committed to supporting the project back in November of 2025.
Stablecoins are a type of cryptocurrency designed to maintain a fixed value, usually pegged one-to-one to a national currency like the yen or the dollar. Right now the U.S. dollar dominates the market, accounting for roughly 99% of all stablecoin value. Analysts point to the regulatory clarity provided by the GENIUS Act, signed into law by President Donald Trump in July of 2025, as a major reason for that dominance.
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But other jurisdictions are pushing back.
Hong Kong, Singapore, and the United Arab Emirates have all shown strong adoption and regulatory support for their own stablecoin projects, challenging what some see as a U.S. monopoly in the space. Back in October of 2025, Japanese startup JPYC launched the first yen-pegged stablecoin backed by domestic savings and Japanese government bonds. That move helped pave the way for the consortium’s current effort.
The International Monetary Fund has warned that widespread stablecoin use could pull money away from smaller national currencies toward dollar-pegged assets, weakening central banks’ control over liquidity and economic activity. That risk is especially high for countries with unstable economies, the IMF noted.
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Stablecoin transaction volumes have grown sharply over the past five years.
According to a Visa analysis, annual transaction volume rose from about $565 billion in the year 2020 to roughly $11 trillion in 2025 — an average increase of about 80% per year. The numbers are raw and include no adjustment for inflation or double-counting.
The trio hasn’t said exactly when the current fiscal period they’ll push the stablecoin into commercial use.
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The council is still hammering out the specifics.
It’s a rare instance of direct competitors working together on a shared digital currency infrastructure for the domestic market.