Japan’s Megabanks Move to Replace Correspondent Banking With Shared Stablecoin
Three of Japan's largest financial institutions are building a joint stablecoin infrastructure aimed at overhauling how corporations move money — a project that signals growing impatience with the inefficiencies of traditional cross-border settlement.
Key Takeaways
- Japan’s three largest banks are building a shared stablecoin for corporate payments, targeting launch by March 2026.
- The stablecoin runs on the Progmat blockchain platform and is legally structured under Japan’s Payment Services Act.
- Mitsubishi Corporation is already testing it for cross-border payments between subsidiaries.
- Analysts project bank-backed stablecoins could reach $2.8 trillion in global circulation by 2028.
Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group launched a joint proof-of-concept in November 2025 under the oversight of Japan’s Financial Services Agency. The target is a full commercial rollout by March 2026. A second round of testing brought in Nomura and Daiwa Securities in February 2026 to explore stablecoin use in securities and fund settlements.
How It Works
The stablecoin is built on Progmat Coin, a blockchain-based tokenization network developed by Progmat Inc., a fintech firm with roots in MUFG. Legally, the instrument is classified as an “Electronic Payment Instrument” under Japan’s Payment Services Act, with MUFG Trust acting as the primary issuer through a trust bank model. The initial version is pegged to the Japanese yen; a dollar-denominated variant is planned.
One of the framework’s more notable technical decisions is its integration with SWIFT messaging. Rather than forcing corporate clients to abandon existing workflows, the system lets them trigger blockchain-based settlements through the same banking infrastructure they already use.
Early Adoption and Market Reach
Mitsubishi Corporation is the first named user, currently testing the stablecoin for internal transfers between its overseas subsidiaries. The appeal is straightforward: reduce fees and processing delays that still plague correspondent banking. The three banks behind the project collectively serve more than 300,000 major corporate clients — a ready-made distribution network that most new financial products could only dream of.
Taking Aim at USDT and USDC
The broader ambition is to enable 24/7 real-time settlement at meaningfully lower cost than the current system. That puts the initiative in direct competition with established global stablecoins such as Tether (USDT) and Circle’s USDC, at least within Japan’s regulated market.
The Bigger Picture
The timing reflects a wider institutional shift. Analysts suggest that as trust in bank-backed digital currencies grows, global circulation of such instruments could climb toward $2.8 trillion by 2028. Japan’s megabanks, it seems, are not content to watch that market develop elsewhere.
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Alex is Editor-in-Chief of Coindoo and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
