MUFG, SMBC, and Mizuho—Japan’s three largest banks—teamed up with blockchain middleware firm Datachain to launch Project Pax, targeting ¥1 trillion ($6.5 billion) in stablecoin issuance by 2028. The platform connects over 300,000 corporate clients via SWIFT’s API, eliminating the need for crypto wallets on the user side. Traditional cross-border wires take 3-5 business days and cost 2-7%; stablecoin settlement compresses cost to under 0.5% and clears in under three minutes, 24/7.
World’s Strictest Stablecoin Framework: Three-Tier Issuer Model
Japan revised its Payment Services Act in June 2023, classifying fiat-pegged stablecoins as Electronic Payment Instruments. A 2025 amendment allows trust issuers to allocate up to 50% of reserves to short-term Japanese Government Bonds, boosting capital efficiency without easing consumer protections. Three issuer categories—commercial banks, trust companies, and licensed fund transfer providers—each face stringent reserve requirements: trust issuers ring-fence assets in bankruptcy-remote structures; fund transfer providers hold 100% liquid reserves; commercial banks issue deposit-backed tokens covered by deposit insurance.
In October 2025, JPYC Inc. became the world’s first fully regulated yen-pegged stablecoin issuer, upgrading from prepaid payment instrument to licensed Electronic Payment Instrument under a Type II funds transfer license. The company targets 10 trillion yen in circulation within three years. Shortly after, SBI Holdings and Startale Group introduced JPYSC, a trust bank-backed yen stablecoin managed by SBI Shinsei Trust Bank, aiming for a Q2 2026 launch.
Mitsubishi Corporation Already Using Progmat Stablecoins for Settlement
Project Pax is live: Mitsubishi Corporation uses Progmat-issued stablecoins to settle transactions between domestic headquarters and overseas subsidiaries. Corporate clients initiate payments through existing banking dashboards; backend smart contracts on Ethereum, Polygon, Avalanche, and Cosmos execute instant value transfers. Banks eliminate nostro/vostro account maintenance costs, and client accounting software stays unchanged.
STANDAGE Inc. partnered with Progmat to build a B2B trade settlement wallet for Japanese firms dealing with regions facing geopolitical or banking constraints on letters of credit. Atomic, real-time settlement replaces legacy trade finance bottlenecks. USDC became the first foreign stablecoin approved for Japanese exchanges after Circle formed a regulated joint venture with SBI Holdings (Circle SBI Japan KK) via SBI VC Trade. Japanese companies now execute cross-border vendor payments in digital dollars without maintaining multiple foreign fiat accounts.
Remittance Corridors: Southeast Asia Workers Benefit from Near-Zero Cost
Japan’s growing foreign workforce, mainly from Southeast Asia, fuels outbound remittances. Traditional retail operators charge spreads consuming 5-10% of a paycheck. Licensed intermediary wallets under the 2025 amendment allow workers to convert yen stablecoins to dollar-pegged stablecoins on decentralized exchanges, routing payments home for local fiat conversion at a fraction of a cent. SBI Holdings’ decade-long relationship with Ripple through SBI Ripple Asia extended this infrastructure to South Korea, India, and the Philippines. The Korea-Japan corridor test in late 2025 involved K Bank, Shinhan Bank, and Nonghyup Bank verifying Project Pax’s cross-border remittance capabilities; Korean blockchain entities signed agreements with JPYC Corporation.
SBI Holdings President Yoshitaka Kitao stated in December 2025: “The shift to a token economy is an irreversible societal trend.” Between 2023 and 2026, Japan built a full-stack institutional stablecoin ecosystem—not a retail gimmick.