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Japanese Banking Giants Enter Stablecoins, Challenge USDT and USDC Dominance

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Three of Japan’s largest banks, Mitsubishi UFJ Bank, Sumitomo Mitsui, and Mizuho, are becoming a member of forces to launch stablecoins pegged to the Japanese yen and US greenback, a transfer to problem the dominance of dollar-backed USDT and USDC stablecoins.

According to an October 17 report from Japanese outlet Nikkei, the yen-backed stablecoin will first be used for settlement by Mitsubishi Corporation.

The three megabanks, which collectively serve over 300,000 main enterprise companions, have united particularly to drive stablecoin adoption throughout Japan.

“The banks will construct a construction for company purchasers to permit for stablecoins to be transferred between them alongside uniform requirements, initially issuing a yen-pegged coin and doubtlessly a dollar-pegged coin sooner or later,” Nikkei reported.

Progmat Is Building Japan’s Stablecoin To Challenge USDT And USDC Dominance

CryptoNews covered this initiative again in April when Mitsubishi UFJ Trust and Banking first introduced plans to situation the nation’s first fiat-pegged stablecoin.

At the core of this growth is Progmat, the blockchain infrastructure firm established by MUFG.

Progmat focuses on constructing digital monetary merchandise that meet regulatory necessities.

The platform will deal with the issuance and governance of the brand new stablecoin, sustaining constant authorized and operational compliance all through.

Beyond Progmat, the banks have partnered with a number of crypto sector gamers, together with home trade Bitbank, blockchain firm Avalabs, and crypto infrastructure provider Fireblocks.

This follows Nikkei’s earlier report that Japan was getting ready to approve its first yen-denominated stablecoin this autumn.

CryptoNews confirmed then that Tokyo-based fintech firm JPYC would lead the launch.

The stablecoin, additionally named JPYC, will preserve its peg to the yen by means of reserves of extremely liquid belongings, together with deposits and authorities bonds.

Potential purposes for the yen-backed stablecoin embody sending cash to college students overseas, facilitating cross-border company funds, and enabling participation in decentralized finance.

Japanese Banking Giants Enter Stablecoins, Challenge USDT and USDC Dominance
Source: X

Over the subsequent three years, the banks plan to issue 1 trillion yen value of JPYC, equal to roughly $6.64 billion on the present trade charge of 150.42 yen to the greenback.

The timing coincides with rising world curiosity in stablecoins, whose whole market capitalization recently crossed $307 billion, with dollar-backed tokens USDC and USDT holding the lion’s share.

Currently, solely Circle’s USDC has obtained approval as a world greenback stablecoin to be used in Japan.

USDC entered the Japanese market after Circle partnered with monetary conglomerate SBI Group in March to record the token on the SBI VC Trade crypto trade.

Jeremy Allaire, CEO of Circle, acknowledged Japan’s welcoming arms to crypto in an X post, stating: “We have spent 2+ years participating with Japan’s regulators, main trade gamers, strategic companions, banking companions and others to allow USDC for the Japanese market.”

Japan Doubles Down on Crypto Adoption

Japan’s revised legal framework, efficient since June 2023, signifies the nation’s intent to problem the dominance of dollar-backed stablecoins.

Under the brand new guidelines, stablecoins are labeled as “currency-denominated belongings” and can solely be issued by banks, belief corporations, and registered cash switch companies.

These coverage adjustments have helped the nation greater than double its crypto adoption over the previous 12 months, according to crypto analytics firm Chainalysis.

Among the highest 5 markets within the Asia Pacific area, Japan recorded the strongest progress, with its on-chain worth obtained rising 120% year-over-year within the 12 months to June, in keeping with an excerpt from Chainalysis’ 2025 Report launched in September.

Over the 12 months to June 2025, the report confirmed that cryptocurrency purchases utilizing JPY stablecoins have been directed primarily towards XRP, which accounted for $21.7 billion in fiat buying and selling exercise, adopted by BTC ($9.6 billion) and ETH ($4.0 billion).

Japanese Banking Giants Enter Stablecoins, Challenge USDT and USDC Dominance
Source: Chainalysis

The dominance of XRP buying and selling is especially notable and means that buyers could also be betting on the real-world utility of XRP following Ripple’s strategic partnership with SBI Holdings.

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