Japan’s top banks complete yen stablecoin pilot, eye launch amid Ripple links

Japan’s three leading megabanks—Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group, and Sumitomo Mitsui Banking Corporation (SMBC)—along with Mitsubishi UFJ Trust and TISI Inc., have completed the first joint pilot of a yen stablecoin system.

Pilot project details

The closed pilot, conducted under the supervision of the Financial Services Agency (FSA), focused on cross-border settlement trials for Mitsubishi Corporation, a major Japanese trading conglomerate. Throughout the tests, the partners issued and redeemed yen-backed digital tokens recognized as “trust beneficiary rights”—a structure ensuring regulatory compliance and investor protection.

Project officials reported that the pilot covered the entire transaction cycle, from stablecoin issuance to redemption in fiat, without encountering any technical issues. The consortium announced plans to commercially launch the stablecoin system before the current fiscal year’s end.

Japan’s megabanks are recognized for their influence in domestic and international finance, collectively handling a significant portion of the country’s banking assets.

Mini dictionary: Trust beneficiary rights refer to claims or interests held in a trust that allow beneficiaries to receive the benefits generated by assets, such as those backing stablecoins, under Japanese law.

Ripple’s influence on Japanese banking

While Ripple is not formally referenced in the consortium’s pilot documents, industry observers note that the initiative draws on a long history of collaboration with Ripple technologies in Japan. MUFG, Mizuho, and SMBC previously participated in the SBI Ripple Asia consortium, which was established to accelerate the adoption of RippleNet for instant domestic and international transfers.

In recent years, Mizuho Bank and SMBC’s investment subsidiary have signed agreements with Ripple Labs aimed at deploying tokenization and decentralized finance (DeFi) infrastructure on the XRP Ledger. These partnerships underscore Japan’s ongoing integration of established blockchain protocols within the traditional banking sector.

The announcement that the new yen stablecoin will be launched on Progmat, a digital asset issuance platform developed by MUFG using the Avalanche blockchain, marks a strategic move by Japanese banks to retain control over compliance and transaction fees by reducing reliance on external liquidity networks like XRP.

Mini dictionary: Progmat is a Japanese platform launched by MUFG, enabling the tokenization and management of digital assets, including stablecoins, on blockchain networks such as Avalanche.

Stablecoin and XRP ecosystem: Divergence or coexistence?

The consortium’s strategy could signal a future split in Japan’s financial landscape. Analysts suggest that the closed Progmat ecosystem, controlled by megabanks, will serve conservative business-to-business transfers among corporations seeking regulatory certainty and direct oversight.

By contrast, XRP and Ripple’s regulated dollar stablecoin RLUSD, launched by SBI Holdings, are positioned to maintain their role in cross-border retail transactions and fintech integration, leveraging the established liquidity and open architecture of the XRP Ledger.

Recent industry events, such as Japanese banking platforms’ presence at XRP Tokyo summits and other Web3 collaborations, highlight a trend toward mutual integration rather than direct competition. The commercial rollout of the yen stablecoin may reinforce a dual system in which both bank-controlled fiat tokens and open digital assets like XRP function as parallel gateways for liquidity and settlement.

Official consortium documents omit direct mention of Ripple, yet nearly all major banking blockchain projects in Japan rely on foundational ties built with Ripple’s network and technologies in previous years.