Japan’s Megabanks Plan to Replace Correspondent Banking With Shared Stablecoin Network
March 6, 2026Japan’s three largest financial institutions are collaborating to build a joint stablecoin infrastructure to replace the traditional correspondent banking model for corporate and cross-border settlements.
Key Highlights
- Japan’s three major banks are creating a shared stablecoin for corporate payments and plan to launch it by March 2026.
- The stablecoin operates on the Progmat blockchain platform and is legally subject to Japan’s Payment Services Act.
- Analysts anticipate that this bank-backed stablecoin will reach around $2.8 trillion in global circulation by 2028.
Japan’s three megabanks – Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMBC), and Mizuho Financial Group introduced a joint proof-of-concept in November 2025 under the supervision of Japan’s Financial Services Agency. They intend a full commercial rollout by March 2026. The second round of testing was conducted by Nomura and Daiwa Securities in February 2026, checking stablecoin use in securities and fund settlements.
How does this stablecoin infrastructure work?
As mentioned, the stablecoin is built on Progmat Coin, a blockchain-based tokenization platform developed by Progmat Inc., initially founded by MUFG. Legally, the instrument is classified as an “Electronic Payment Instrument” under Japan’s Payment Services Act. The MUFG Trust acts as the primary issuer through a trust bank model. The initial stablecoin is pegged to the Japanese yen. A U.S. dollar-denominated version in the future is also planned.
One of the key integrations is the SWIFT messaging integration, to minimize disruption. With this, corporate clients can initiate blockchain-based settlements using familiar banking interfaces or banking infrastructure they already use.
Early Implementation and Market Reach
The first major user is Mitsubishi Corporation, which is currently piloting the stablecoin for internal transfers between its global subsidiaries. The aim is to reduce fees and processing delays, a major factor affecting the banking system. The three megabanks serve over 300,000 corporate clients, providing a ready-made distribution network.
Positioning as a global competition
The new ambition poses competition to various established stablecoins, such as Tether (USDT) and Circle’s USDC. It becomes a bank-backed stablecoin providing lower-cost transactions than the current system.
Final thoughts
Japan’s bank-backed stablecoin infrastructure helps eliminate the multiple intermediaries and cut-off times usually faced by correspondent banks. It also aligns with international requisites, such as faster, cheaper, and more transparent cross-border payments. A full commercial rollout of this stablecoin infrastructure will occur in March 2026. This initiative also indicates expanding interest in digital currencies within the financial sector.
Initially, the stablecoins will be pegged 1:1 to the yen and later on scaled to the dollar. It enables the sender to transfer money instantly without the need for any intermediary. This stablecoin is also functional 24/7. Corporations can also save millions of dollars spent on intermediary fees and reduce administrative work. Regulated by Japan’s top banks, this stablecoin provides a secure, low-risk alternative for corporate finance. It would also enter direct competition with established global stablecoins, such as USDT and USDC.
Various market analysts suggest that when bank-backed digital currencies grow, the overall circulation of stablecoins could reach $2.8 trillion by 2028.