When the banks choose crypto rails
Japan’s largest banks are launching a joint stablecoin framework. Beneath the headline is a deeper shift: programmable, interoperable finance is becoming the default setting.
Stablecoins might be boring — and at first glance, an interbank stablecoin play might feel, well, extra boring.
But if we unpack what’s happening here — that Japan’s three largest banks are quietly aligning on shared crypto infrastructure — the whole thing starts to feel a lot less mid.
I’ve been talking about programmable money for a while now:
Daniel McGlynn
This announcement shows what it looks like when that idea grows up — when it gets regulated and deployed by some of the most conservative institutions on the planet.
Programmability is one of the core design pillars of Open Money. And this newsletter is about what happens when that design leaves the lab and moves into the real world.
Here’s what’s happening
Last week, Mitsubishi UFJ (MUFG), Sumitomo Mitsui (SMFG), and Mizuho announced that they are planning a joint stablecoin framework.
It starts with a yen-pegged coin and opens the door to future dollar rails. The shared goal is interoperability — so corporate clients can issue, move, and settle tokenized cash between the three banks without friction or custom integrations.
They’re likely using MUFG’s Progmat (Progmat as in programmable assets) platform to handle issuance. Progmat is new-ish — and was created to handle things like tokenized bonds and other digital assets.
Extending it to money turns it into a kind of regulated middleware for transferring value across institutions. Think of it as an update to the plumbing that supplies modern banking infrastructure. In this case, the plumbing upgrade comes in the form of specialty stablecoins.
Daniel McGlynn
Japan’s legal framework already allows banks to issue stablecoins under supervision. This project takes the existing legal clarity and applies it at the scale of the domestic financial system.
And while the initial rollout is yen-only and domestic, the architecture is built for more.
If you still wait days for ACH transfers for routine payments, you can probably easily appreciate the value of making interbank transfers faster and more efficient.
Why this matters
What’s different about this project is coordination. Three major institutions are aligning on a shared legal and technical model. We've seen banks do some experimental stuff onchain already. But this sounds different because it's a system designed to make banks work together more efficiently.
That shared model is where things start to shift. It creates space for automation: not just faster transfers, but transfers with logic baked in, or smart instructions stitched into workflows, without third-party intermediaries.
That has real impact for operations teams and corporate treasury.
Settlement cycles can compress from days to seconds. FX positions can be balanced intraday. Supplier payments can be released automatically based on delivery milestones. Weekend settlement becomes normal.
There are already signs of similar projects in Hong Kong, Singapore, and elsewhere in the region.
Taken together, these point toward a future where programmable money moves fluidly across regulated environments — where tokens become the default infrastructure for institutional money.
Daniel McGlynn
How this connects to Open Money
The headline here is that programmability is becoming an institutional requirement.
The banks could have built a private ledger, API, or some permissioned integration layer. Instead, they’re opting for infrastructure that treats money as code — infrastructure that opens the door to composability.
That’s the shift Open Money exists to support.
The goal of Open Money is to understan why building a toolkit for programmable value is so important (and, likely, inevitable). The real goal is not to create systems that are only tied to one issuer or chain, but shaped around the idea that money — once expressed as software — should move fluidly and securely across all kinds of financial stacks.
What’s happening in Japan shows that the future of money isn’t one system replacing another. It’s convergence: legacy institutions adopting crypto-native mechanics, with regulatory scaffolding layered around them. And as more of these systems come online, they’ll need shared primitives — a way to speak the same language, even if their architectures differ.
Daniel McGlynn
What’s ahead
The Japanese rollout will probably stay domestic for now. Limited corridors, pilot volumes. But once the USD leg arrives — and once cross-border use cases start landing — the possibilities open up.
You’ll start to see automated FX swaps between onchain yen and dollars. Custodians moving client money outside of wire windows. Exchanges settling trades 24/7 with bank-issued money.
Over time, these systems will stop being newsworthy. They’ll just be infrastructure. They'll become boring and standardized, the way internet protocols or email protocols are boring and standardized.
The real stories then will be how these once-disparate forms of value — stablecoins, bankcoins, even certain CBDCs — start to compose with each other. Not because they’re centrally coordinated. But because they’ve been built with shared expectations around logic, trust, and interoperability.
That’s the direction this is all moving in.