Japan's Largest Banks Join Forces for Stablecoin Launch

Japan's largest banks are taking a significant step towards launching a stablecoin, following the country's clarification on regulatory frameworks in 2023.

The three megabanks - MUFG Bank, Mizuho Bank, and Sumitomo Mitsui Banking Corporation - have established a council to develop operational frameworks for jointly issuing a stablecoin by March 2027.

According to the banks' statement, the stablecoin will be issued under a trust agreement, with the three banks serving as joint settlors, while a 'trust bank or similar institution' will act as trustee.

The initiative is part of Japan's Payment Innovation Project, which aims to accelerate blockchain-based payment innovations. The project operates under the FSA's FinTech Proof-of-Concept Hub that has supported fintech experiments since 2017.