Japan's Big Three Banks Plan Joint Yen Stablecoin by March
In brief
- MUFG, SMBC, and Mizuho establish council to explore yen stablecoin operational frameworks.
- Three banks act as joint settlors with trust bank serving as trustee.
- Japan's FSA and ruling LDP signal support for yen-based stablecoin development.
- Yen-pegged tokens represent under $50M of $311B global stablecoin market.
- USDT and USDC dominate with 84% combined market share.
Framework and structure
MUFG, SMBC and Mizuho will establish a council to explore operational frameworks and prepare for stablecoin issuance. The three banks will act as joint settlors, with a trust bank or similar institution serving as trustee. This structure separates settlement functions from custody, a common approach in regulated stablecoin designs.
The arrangement reflects Japan's regulatory environment. Japan's Financial Services Agency signaled support for the development of a stablecoin by the three banks in November. The ruling Liberal Democratic Party also weighed in, saying the state should promote usage of yen-based stablecoins.
Market context
Stablecoins are digital tokens pegged to the value of a traditional financial asset, usually a fiat currency. The global stablecoin market is dominated by a handful of players. Tether's USDT and Circle Internet's USDC account for a combined 84% of the stablecoin market share.
Yen-pegged tokens lag far behind. Tokens pegged to the yen represent less than $50 million in the $311 billion stablecoin sector. The most prominent is JPYC, issued by a Tokyo-based fintech of the same name, with a market cap of around $18 million. A major bank consortium could shift that dynamic.
The March deadline signals intent. Japan's three largest financial institutions are moving fast to capture the yen-stablecoin market before smaller players entrench further.
