Japan’s Financial Services Agency (FSA) has officially approved a proof-of-concept (PoC) trial for a yen-denominated stablecoin, involving the country’s three largest banks: Mizuho Bank, Mitsubishi UFJ Financial Group (MUFG), and Sumitomo Mitsui Banking Corporation (SMBC).
This greenlight, announced on November 7, 2025, marks a significant step in integrating blockchain technology into Japan’s payment systems under the FSA’s “Payment Innovation Project.” The banks aim to finalize the trial and launch the stablecoin for practical use by March 2026.
The consortium includes Mizuho, MUFG, SMBC, Mitsubishi Corporation, Progmat Inc. (MUFG’s blockchain platform), and Mitsubishi UFJ Trust and Banking Corporation. This collaboration focuses on creating a unified infrastructure for issuing and transferring stablecoins among corporate clients.
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The trial will test joint issuance of stablecoins classified as “electronic payment instruments” under Japan’s Payment Services Act amended in June 2023. It emphasizes secure, regulated digital payments backed 1:1 by yen reserves, such as bank deposits and government bonds.
PoC trials begin this month, with a full rollout targeted for March 2026, aligning with Japan’s fiscal year-end. Initial focus is on yen-pegged tokens, with potential expansion to USD versions later. Built on Progmat’s platform, which supports tokenization and has been piloted for interbank settlements.
1:1 pegged to Japanese yen; reserves in bank deposits and government bonds. Licensed banks (Mizuho, MUFG, SMBC) and trust companies only, per regulations. Corporate payments, interbank transfers; potential for broader adoption
FSA’s Payment Innovation Project; ensures compliance with anti-money laundering rules. This initiative builds on Japan’s progressive crypto framework, where stablecoins are treated as “currency-denominated assets” since 2023, restricting issuance to trusted institutions to mitigate risks like those seen in past stablecoin failures (e.g., TerraUSD).
It’s separate from but complementary to other efforts, such as JPYC’s recent launch of a yen-backed stablecoin on October 28, 2025, which has already attracted interest from seven companies for integration. Experts like Rajiv Sawhney of Wave Digital Assets International predict a smooth rollout but limited initial adoption due to regulatory caution and competition from existing payment systems.
Globally, this could influence G7 standards for stablecoin oversight, positioning Japan as a leader in regulated digital finance. The project underscores Japan’s push toward blockchain-enhanced payments amid rising interest in central bank digital currencies (CBDCs), though it remains a private-sector stablecoin rather than a full CBDC.
Progmat is a leading Japanese blockchain-based platform specializing in the tokenization of assets and the issuance of digital tokens, including stablecoins, security tokens, and utility tokens.
Founded in February 2022 by Mitsubishi UFJ Financial Group (MUFG), Japan’s largest bank by assets, it has evolved into a joint venture backed by major financial institutions such as Mizuho Bank, Sumitomo Mitsui Banking Corporation (SMBC), Japan Exchange Group (JPX), and SBI Holdings.
The platform aims to bridge traditional finance (TradFi) with decentralized finance (DeFi) by enabling programmable networks for digital assets, facilitating secure, regulated issuance, transfers, and settlements.
Progmat is particularly prominent in Japan’s stablecoin ecosystem, where it supports yen-pegged tokens under the revised Payment Services Act, which restricts stablecoin issuance to licensed banks and trust companies.
Progmat’s core technology leverages R3’s Corda enterprise blockchain for robustness and scalability, combined with public blockchain integrations for broader interoperability. It positions itself as infrastructure for transforming real-world assets (RWAs) into digital forms, targeting corporate payments, interbank settlements, and tokenized real estate.
As of November 2025, Progmat is central to Japan’s push for regulated digital payments, including the recent FSA-approved stablecoin pilot involving MUFG, Mizuho, and SMBC.Key Features and CapabilitiesProgmat offers a modular ecosystem for token lifecycle management, emphasizing compliance, cross-chain functionality, and programmability.
Supports three stablecoin types under Japan’s regulations: bank deposit-backed, trust-type (e.g., via MUFG Trust), and fund-type. Enables joint issuance by multiple banks for shared liquidity and liability. Also handles security tokens (e.g., real estate RWAs) and utility tokens.
Cross-Chain Interoperability
Integrates with public blockchains like Ethereum, Polygon, Avalanche, and Cosmos via bridges built with partners DataChain and TOKI. Allows cross-chain swaps, payments, lending, and settlements (e.g., NFT purchases settled in Progmat Coin on a different chain). Additional networks planned for expansion.
Wallet and Custody
Partners with Ginco for enterprise wallets optimized for trade settlements. Provides banking-grade custody with 1:1 yen reserves (e.g., deposits, government bonds) and AML/KYC compliance.
Settlement and Use Cases
Focuses on corporate payments, interbank transfers, and trade finance (e.g., exports to emerging markets). Enables faster T+0 settlements, reducing costs for over 300,000 corporate clients. Explores tokenizing foreign real estate and linking ST data under PII laws.
Security and Compliance
Built on permissioned and permissionless models; adheres to FSA’s prudential controls. Supports data utility frameworks for rights holders, as outlined in the DCC’s 2025 ST Data Linkage report.
October–November 2025: Selected for FSA-backed yen stablecoin pilot with top banks; PoC starts November 2025, full launch March 2026. Recent DCC report standardizes ST data usage. Progmat has issued numerous security tokens, primarily for Japanese real estate and bonds, making it Japan’s most active tokenization platform.
With MUFG, Mizuho, SMBC, and Mitsubishi Corporation, using Progmat for joint issuance and corporate payments. Aims to integrate with bank systems for interoperable settlements. Part of the Digital Asset Co-Creation Consortium (DCC), focusing on RWA tokenization and DeFi-TradFi blends.
Progmat underscores Japan’s regulated approach to blockchain, potentially influencing G7 stablecoin standards by prioritizing bank-backed, interoperable tokens. Challenges include limited initial adoption due to regulatory caution and competition from CBDC pilots, but its scalability could drive multinational use cases like tokenized trade finance.