Japan's three largest megabanks, MUFG, Mizuho, and SMBC, along with Mitsubishi UFJ Trust and TISI Inc., have successfully completed the first joint trials of a yen stablecoin. The pilot project, supervised by the Financial Services Agency (FSA), tested cross-border settlements for Mitsubishi Corporation. The stablecoins, issued as 'trust beneficiary rights,' successfully completed the full cycle from issuance to redemption into fiat without any issues.
The commercial launch of the system is planned before the end of the current fiscal year. While Ripple is not officially mentioned in the consortium's documents, the test is closely tied to the XRP Ledger (XRPL) ecosystem. All three megabanks have a long history of integrating Ripple's technologies for instant domestic and cross-border settlements.
Back in 2017, the banks joined a consortium under SBI Ripple Asia to implement RippleNet technologies. Recently, Mizuho Bank and SMBC's investment arm also concluded agreements with Ripple Labs to deploy real-world asset (RWA) tokenization infrastructure and institutional DeFi solutions on the XRP Ledger.
The launch of the digital yen on the Progmat platform, created by MUFG on the Avalanche blockchain, suggests an attempt to build an isolated alternative to external liquidity bridges like XRP. This could lead to a segmented market where the closed infrastructure of the megabanks competes with Ripple's regulated dollar stablecoin RLUSD and the liquidity of XRP.