Mizuho Bank, MUFG Bank and SMBC have completed a joint trial of a yen-pegged stablecoin for cross-border payments, Trade Finance Global reported. Japan’s three largest banks announced the result on 16 October, following tests conducted from 17 to 23 July with Japanese technology company TISI and Mitsubishi UFJ Trust and Banking Corporation.
The exercise covered payments between Mitsubishi Corporation’s Japanese and overseas offices, examining both regulatory requirements and the practical arrangements for international transfers. It tested issuance, transfers and conversion back into yen. According to Trade Finance Global, the banks said the trial demonstrated that joint issuance was workable and that the stablecoin could be redeemed, although its design remains subject to change before launch.
The structure was established under Japan’s Payment Services Act, with the three banks jointly serving as principal trustees, or issuers. Mitsubishi UFJ Trust and Banking acted as agent trustee, managing the funds backing the coins. Those funds are held in bank deposits to support a stable value. SMBC provided the blockchain platform built by TISI, which also linked the digital wallet system to the issuance system.
With backing from Japan’s Financial Services Agency, the trial examined how several issuers could operate together while complying with anti-money laundering and counter-terrorism financing requirements. Access is restricted to users who have completed identity checks. Joint issuance allows the coin to reach customers of all three banks, while no ceiling has been set on circulation because the banks envisage large-scale use.
The report also highlighted a gap between consumer understanding and prospective demand. A Visa survey of 14,250 consumers across 14 Asia-Pacific markets found that only 6% understood stablecoins accurately, with many believing they appreciate in value. Nevertheless, 46% said they were likely to use them within five years, compared with 16% who reported using them during the preceding 12 months.
The banks’ next steps are to address outstanding issues in cooperation with regulators in Japan and overseas. They identified protection of users, cybersecurity and the stability of the system as their central priorities as development continues.