Japan Backs Bank-Led Stablecoin Trial for Cross-Border Payments
The Japan Financial Services Agency (FSA) has announced its support for a new project led by the country’s three largest banks to jointly issue stablecoins. This move signifies an important change for Japan, a country where people still mostly use cash and credit cards for daily payments.
Finance Minister Satsuki Katayama, who also oversees the FSA, confirmed the plan after a cabinet meeting on November 7. The project will be carried out by the banking arms of Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group.
Together, these financial giants will develop and issue stablecoins that will first be tested for cross-border payments. According to Mitsubishi UFJ, the testing phase will help determine how well these digital tokens can support fast, low-cost, and secure international transfers.
Despite being one of the most technologically advanced nations in the world, Japan continues to rely heavily on physical cash and traditional credit cards for everyday transactions.
The FSA will evaluate whether the project complies with Japan’s financial laws to ensure it can operate safely within the regulated system. By supporting stablecoins, the government wants to make digital payments easier and move closer to a cashless future.
Japan Strengthens Push Toward Digital Finance with Stablecoin Growth
Stablecoins are digital tokens tied to real-world currencies, such as the yen or the U.S. dollar, to keep their value stable. Unlike Bitcoin, stablecoin prices do not swing wildly, making them more suitable for payments and trade.
The announcement comes just a week after JPYC, a domestic startup, introduced the world’s first yen-backed stablecoin. This initiative was supported by Japanese government bonds and domestic savings.
This back-to-back progress from both private startups and major banks reflects how seriously Japan is embracing digital finance as part of its national growth strategy.
Global Regulators Move to Strengthen Oversight of Stablecoins
Globally, stablecoins have gained attention and support. Regulators around the world are setting clear regulations in place to back stablecoin holders and issuers.
This comes as the fiat-backed digital asset is viewed as a tool to modernize finance and speed up global transactions. After the U.S. government passed the GENIUS Act into law in July, Canada has also taken steps to update its financial and digital payment systems.
The country is getting ready to bring in new laws to manage stablecoins backed by regular money. This regulatory framework is poised to address concerns about whether issuers hold enough real-world assets to fully back the tokens they issue.
Poorly managed stablecoins could pose risks to financial stability or allow funds to move outside regulated systems.
Japan’s approach seeks to avoid these risks through strong oversight and coordination between the FSA and major financial institutions.