MUFG Bank, Mizuho Bank, and Sumitomo Mitsui, considered the three megabanks of Japan, are joining forces to create a stablecoin pegged to the Japanese yen.
According to a note published by MUFG this Wednesday (10), the digital currency should be launched in 2026. In addition to the three parties working together as investors, the idea is to carry out real transactions with this stablecoin between banks.
“As part of this initiative, the Three Banks recently signed a memorandum of understanding to establish a voluntary council with the aim of jointly analyzing operational structures, governance, and other issues related to the practical implementation of the stablecoin in question.”
Three of Japan's largest banks are joining forces to launch a stablecoin pegged to the Japanese yen. Source: MUFG.
The stablecoin sector is dominated by currencies pegged to the US dollar, but the three largest Japanese banks want to change that.
A study by the BIS, published in May, revealed that 98% of stablecoins on the market are pegged to the US dollar . Given this, other countries fear that the US currency will begin circulating in their economies due to the benefits of this technology.
In Europe, the race against time is being waged by both the public and private sectors. For example, the European Central Bank approved a budget of €1.1 billion for the creation of a Digital Euro , and in addition, nine European banks (including ING, CaixaBank, and UniCredit) have joined forces to launch their own stablecoin .
This Wednesday, Japan's three largest banks (Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group) also announced that they are creating a stablecoin pegged to the yen .
“The council will serve as a framework to analyze the potential development of an issuance infrastructure related to the stablecoin in question, as well as the design of systems, models, and governance structures. The three banks will move forward with preparations for the creation of the council and continue the analysis of the stablecoin in question, taking into account applicable laws and regulations, as well as market trends.”
The text points out that blockchain technology is already being increasingly explored in Japan and other parts of the world to improve payment systems.
Regarding the dates, the announcement states that the goal is to conduct real transactions with the stablecoin, which is still unnamed, as early as 2026. External sources, such as Reuters, claim that the deadline could be as late as March 2027.
The Bank of Japan continues to raise its interest rate.
The Bank of Japan (BoJ) conducted a major economic experiment over the past decade, keeping interest rates negative for almost eight years. However, the devaluation of the yen against other currencies and inflation problems led the bank to begin raising interest rates in 2024.
Since December, the interest rate has been at 0.75%, a low number compared to other countries, but with significant effects on the local and global economy.
The Bank of Japan's interest rate has been negative for about 8 years. Source: TradingEconomics.
The yen continues to experience one of its worst periods in history against the US dollar, even with intervention from the Bank of Japan in interest rates. Source: TradingView.
Given that Japan is currently the world's fourth-largest economy and its currency is among the most important in the market, the launch of a stablecoin by the country's three megabanks could strengthen the JPY and modernize its payment systems.
