Japan’s Financial Services Agency (FSA) has officially given the green light to a stablecoin pilot project, which is a collaboration among the three biggest banks of the country — Mizuho Bank, MUFG, and SMBC — and it is a major milestone for Japan’s digital payments innovation. The move is a clear indication of Japan’s growing effort to create a regulated blockchain-based financial system and to facilitate the interoperability of banking institutions.
According to the FSA’s statement released Friday, the project is the collaboration of the megabanks with Mitsubishi Corporation, Progmat Inc., and Mitsubishi UFJ Trust and Banking Corporation to study the joint issuance of stablecoins by several institutions that are to be considered “electronic payment instruments” under Japan’s financial laws. The project will focus on regulation compliance, consumer protection, and operational efficiency in the context of existing regulatory frameworks.
According to the FSA, this pilot is the first initiative under the newly launched Payment Innovation Project (PIP), a project that aims to speed up the blockchain and fintech trial in the Japanese financial sector. PIP works under the FinTech Proof-of-Concept Hub, which was set up in 2017 to provide support for the implementation of new technologies and digital finance in a regulated environment.
The experiments are designed to see if the jointly managed stablecoin system of the major banks can operate “lawfully and appropriately” under Japanese financial regulations. The regulator is going to observe the experiment’s performance very closely and will evaluate its impact on payments infrastructure, settlement speeds, and compliance standards.
The FSA announced that the trial will start in November 2025 and will continue for quite some time. The agency will post the results of the experiment on its website. The findings will include legal, compliance, and technological aspects learned during the test period.
The partnership comes as Japan is ramping up its initiative to revamp its financial system, thereby creating a basis for quicker, safer, and more transparent digital payments to be extended to both institutional and retail sectors. The FSA’s approval is also in line with worldwide stablecoin regulation trends, as governments and financial regulators consider different frameworks for the seamless integration of digital assets into the conventional banking systems.
Crypto evolves every second—make sure you don’t miss a beat. Visit Chainbull for expert insights, detailed market breakdowns, and trusted updates from the world of blockchain and digital assets.
