Three of Japan’s largest banks have announced they will jointly issue a stablecoin this fiscal year, which ends in March.
Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMBC) and Mizuho Financial Group will establish a council to explore operational frameworks and prepare for the issuance of stablecoins, according to a statement published on the MUFG website.
The three banks will act as “joint settlors and a trust bank or similar institution will act as trustee,” the statement said.
The Japanese Financial Services Agency (FSA) signaled its support for the development of a stablecoin by the three banks last November. Most recently, the ruling Liberal Democratic Party (LDP) said the state should promote the use of yen-based stablecoins.
Stablecoins are digital tokens tied to the value of a traditional financial asset, typically fiat currency. The market is largely dominated by US dollar tokens, with Tether’s USDT and Circle Internet’s USDC (CRCL) alone accounting for a combined 84% market share.
Yen-pegged tokens represent a negligible share of the market, accounting for less than $50 million in a $311 billion industry. The largest is JPYC, with a market capitalization of around $18 million, issued by a Tokyo-based fintech of the same name.
