Mitsubishi UFJ to launch Japanese yen-backed stablecoin

• Yen-pegged stablecoin to be launched by Mitsubishi UFJ
• Digital currency will initially be used in the carbon market
• Japan moves forward with regulating stablecoins with institutional support

Mitsubishi UFJ Trust and Banking, the arm of Japan’s largest financial group, is finalizing preparations to launch the first stablecoin pegged directly to the Japanese yen. Development of the digital currency was expected to be completed by 2024, according to local media reports, and the project is in the final stages of fine-tuning ahead of official implementation.

The stablecoin will initially be applied to carbon credit trading, with the aim of reducing costs and speeding up settlements. Hiroshi Kubota, CEO of Mitsubishi UFJ Trust, said that the currency will also be expanded to trade settlements and other financial transactions in the future. According to the executive, the technology has the potential to drastically reduce fees associated with international transfers, promoting greater efficiency in the traditional banking system.

The currency will be classified as an “electronic payment instrument” as provided for by Japan’s Payment Services Act. This classification provides greater legal certainty for the project, as well as paving the way for institutional adoption.

The launch is being carried out in partnership with Progmat and other affiliates. The initiative highlights Mitsubishi UFJ's leading role in developing blockchain solutions in the country, while other institutions, such as Sumitomo Mitsui Financial Group, are also moving forward with similar plans for yen-linked stablecoins.

The bank's move is part of a larger revenue diversification strategy that aims to reach ¥30 billion (equivalent to $206 million) in gross profits by 2034. Part of that target will be driven by stablecoin-related projects and collaborations with startups in the sector.

With this step, Japan reinforces its position as one of the main centers of innovation in digital financial infrastructure, by integrating stablecoins into the banking system with legal and institutional support.