Japan's Megabanks Complete Joint Stablecoin Trial: A Deposit-Backed, KYC-Gated Blueprint for Bank-Issued Digital Money

What was tested

The trial ran from July 17 to 23, 2026. Mizuho, MUFG Bank and SMBC acted as joint settlors under a trust agreement, with Mitsubishi UFJ Trust and Banking as trustee. The stablecoin was issued as a "specified trust beneficiary interest" under Japan's Payment Services Act. The use case was settlement between Mitsubishi Corporation's offices in Japan and abroad, and the participants ran issuance, transfer and redemption end to end.

The trial covered three main areas: how to govern an arrangement with several settlor banks, anti-money-laundering and counter-terrorist-financing (AML/CFT) controls for each use case, and the trustee's measures for user protection and for managing trust assets. SMBC supplied the blockchain platform, which TISI built under contract with SMBC, to all participants.

The outline of a production design

The most significant part of the announcement is the production design it describes. It has three elements: a trust-based structure with no cap on circulation, trust assets held and managed as bank deposits, and circulation limited to users whose identity a bank has verified. The release states that this design is provisional and may change.

The design is easiest to understand next to Japan's two existing yen stablecoins. JPYC, launched in October 2025, is issued under the funds-transfer framework, which caps amounts such as individual transfers at JPY 1 million. SBI Group's JPYSC, launched in June 2026, is trust-based and has no cap, but for now it can only be used inside SBI VC Trade accounts. The megabank model is also trust-based and uncapped, but it is backed by bank deposits rather than assets such as government bonds. That choice keeps the stablecoin tied to the banks' own funding base instead of separating the two.

Background and open questions

The Financial Services Agency (FSA) selected the project on November 7, 2025 as the first case under its Payment Innovation Project (PIP). On June 10, 2026, the three banks agreed to target live transactions within FY2026 and to set up a council to work out operations and governance.

Much remains undisclosed. The banks did not name the blockchain, and they published no quantitative results such as issuance volume or processing times. Progmat, listed among the applicants in November 2025, does not appear in this announcement. Restricting circulation to verified users offers regulatory comfort, but it may cost connectivity to public-chain DeFi and global wallets. The key question for the live phase is which way the banks lean: toward more efficient corporate payments, or toward an on-ramp into on-chain finance.

Business Development Insights

1. A deposit-backed trust model lets banks offer a stablecoin while limiting deposit outflows. Corporate treasury teams may be able to adopt on-chain settlement without changing their main banking relationships, so it is worth preparing treasury-system and ERP integrations early.
2. Limiting circulation to verified users creates a new market around who operates the wallet and identity layer. Linking bank KYC to wallets and setting rules for sharing user data across banks are areas with business opportunity.
3. Three yen stablecoin models will now coexist: JPYC (funds-transfer), JPYSC (single-group trust) and the megabank model (joint, deposit-backed). In practice, users will need to pick a model per use case and exchange between them. Interoperability layers and payment intermediaries that absorb the differences between models could become the next competitive arena.

Sources

Mizuho Bank press release (Oct 16, 2026) https://www.mizuhobank.co.jp/release/pdf/20261016release_jp.pdf MUFG Bank press release https://www.bk.mufg.jp/news/news2026/pdf/news1016_1.pdf SMBC press release https://www.smbc.co.jp/news/pdf/j20261016_01.pdf Mitsubishi UFJ Trust and Banking press release https://www.tr.mufg.jp/ippan/release/pdf_mutb/261016_1.pdf TISI press release https://www.tisi.jp/news/2026/tisi_news/20261016_2.html PR TIMES (TISI) https://prtimes.jp/main/html/rd/p/000001983.000011650.html PR TIMES (Mitsubishi UFJ Trust) https://prtimes.jp/main/html/rd/p/000000384.000036656.html Financial Services Agency, PIP support decision (Nov 7, 2025) https://www.fsa.go.jp/news/r7/sonota/20251107-2/02.html Impress Watch (June 10, 2026 agreement) https://www.watch.impress.co.jp/docs/news/2116013.html Atarashii Keizai (NEW ECONOMY) https://www.neweconomy.jp/posts/617525 The Block https://www.theblock.co/post/404212/japans-three-megabanks-stablecoin-march-2027 JPYC Inc. via PR TIMES https://prtimes.jp/main/html/rd/p/000000321.000054018.html SBI Shinsei Bank, JPYSC launch document https://corp.sbishinseibank.co.jp/ja/news/news/20260624b/main/01/link/20260624_JPYSC.pdf