Japan’s financial regulator, the Financial Services Agency (FSA), has endorsed a joint initiative by the country’s top financial institutions to issue yen-backed stablecoins.
In a statement released Friday, the FSA announced the launch of its “Payment Innovation Project,” aimed at leveraging blockchain technology to improve payment systems. The project brings together major players including Mizuho Bank, Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, Mitsubishi Corporation and its financial arm, as well as Progmat, MUFG’s stablecoin issuance platform.
The move builds on recent reports that these institutions plan to modernize corporate settlements and lower transaction costs through a yen-based stablecoin issued via the Progmat platform. Collectively, the participating institutions serve more than 300,000 corporate clients.
According to the FSA, the consortium will begin issuing payment stablecoins this month. The initiative seeks to enhance user convenience, boost corporate productivity, and drive innovation across Japan’s financial ecosystem.
The regulator emphasized that participating institutions must prioritize user protection and transparency regarding the systems in use. “After the completion of the pilot project, the FSA plans to publish the results and conclusions,” the statement added.
The announcement coincides with the launch of JPYC’s yen-backed stablecoin earlier this week. The Tokyo-based fintech introduced Japan’s first regulated yen stablecoin alongside a dedicated platform. JPYC president Noriyoshi Okabe noted that seven companies have already expressed interest in adopting the new digital currency.
Japan’s evolving crypto regulatory landscape
Japanese regulators have been actively updating their approach to the crypto industry. Recently, Bybit, the world’s second-largest crypto exchange by trading volume, announced it would pause new user registrations in Japan while adapting to new local requirements.
Meanwhile, the FSA is reportedly preparing to review existing regulations to allow banks to hold cryptocurrencies like Bitcoin (BTC) as investment assets. Simultaneously, the Securities and Exchange Surveillance Commission (SESC) is drafting rules to combat insider trading in crypto markets, granting it authority to investigate suspicious transactions and impose fines.
Together, these developments signal a measured but accelerating effort by Japan’s regulators to modernize financial infrastructure while ensuring market integrity.
