Japan’s financial regulator approved a pilot project for the joint issuance and legal assessment of stablecoins, with participation from several major financial institutions, including the country’s three largest banks.
The Financial Services Agency of Japan (FSA) announced the launch of the Payment Innovation Project (PIP), an initiative aimed at fostering innovation in digital payments. The pilot program will focus on the joint issuance of a yen-pegged stablecoin, involving Sumitomo Mitsui Financial Group (SMFG), Mitsubishi UFJ Financial Group (MUFG) and their subsidiaries, as well as Mizuho Bank and FinTech company Progmat.
Japan established the FinTech Proof-of-Concept Hub in 2017 to support innovative financial projects. The new PIP division will serve as a specialized platform for innovation in the fields of payments and digital currencies. The stablecoin issuance project is the first under the PIP framework and the eleventh overall in the hub’s history.
The project aims to explore the legal and practical aspects of joint stablecoin issuance by multiple banking groups. During the trials, participants will evaluate whether current regulations allow banks to safely and lawfully implement such initiatives, while also assessing potential risks and consumer protection requirements.
According to the FSA’s statement, the experiment will begin in November 2025 and continue until further notice. Upon completion, the agency will publish its findings, including compliance, supervisory, and legal issues that may arise when providing similar services to end users.
The project received approval based on five key criteria:
- clarity of objectives and scope;
- social significance, including improved user convenience and increased business efficiency;
- innovative potential, seen as a step toward further financial digitalization;
- robust consumer protection and transparent communication with test participants;
- sufficient resources to conduct the trials.
The FSA emphasized that it’ll continue to support promising experiments in the fields of FinTech and blockchain, publishing details on each approved project as they launch.
A similar initiative was launched in Europe in September 2025, where nine leading European banks joined forces to issue a euro-pegged stablecoin compliant with MiCA regulations.
