Japan’s Financial Services Agency Launches Stablecoin Initiative and Proposes Stricter Crypto Lending Rules

Japan’s Financial Services Agency (FSA) has announced two major steps to strengthen and advance the country’s cryptocurrency sector — the launch of a stablecoin proof-of-concept with leading banks and new proposals to tighten regulations on crypto lending and initial exchange offerings (IEOs).

**Major Japanese Banks Unite for Stablecoin Trials**

On 7 November, the FSA unveiled the Payment Innovation Project (PIP) as part of its FinTech Experimental Hub. The initiative brings together some of Japan’s largest financial institutions to test the issuance of stablecoins within a controlled, regulated framework.

Participants include Mizuho Bank, Mitsubishi UFJ Bank, Mitsubishi Corporation, Mitsubishi UFJ Trust and Banking Corporation, Sumitomo Mitsui Banking Corporation, and Progmat.

> “Considering the growing domestic and international progress in exploring advanced payment systems using blockchain technology, the FSA launched the ‘Payment Innovation Project’ (PIP) — a sub-initiative within the FinTech Proof-of-Concept Hub specialising in the payment sector — on 7 November 2025,” the regulator stated.

According to the FSA, the project will explore whether multiple banking groups can legally and efficiently issue electronic payment instruments via blockchain technology. The trial will assess compliance procedures, operational readiness, and regulatory alignment.

> “After the completion of the PoC, the FSA plans to publish the experiment’s results and conclusions on its official website. These will include key findings related to compliance and supervisory responses, as well as practical issues in legal interpretation that may arise when providing services to the general public,” the agency added.

This follows the 27 October debut of Japan’s first regulated yen-pegged stablecoin, launched by JPYC Inc. under the Payment Services Act.