Yen on Solana 💴
Japan's Minna Bank is turning public blockchains into everyday payment rails
Here’s an everyday scenario. A customer orders a latte at a coffee shop in Tokyo and reaches for their phone to scan a QR code. But the barista shakes their head, pointing to a small sign that reads "Cash Only."
Despite Japan’s global image as a high-tech haven, cash is still the king in the Land of the Rising Sun. Over 55% of transactions in Japan are still made with cash.
An experiment underway at Minna Bank, Japan’s first fully-digital banker, could change that. No, I’m not narrating another story about a new government-run payment system or a central bank digital currency (CBDC). Instead, Minna Bank is plugging something very old (the yen) into something very fast (a public blockchain).
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This isn’t a workaround. It’s how cross-chain was supposed to work from the start.
Minna Bank is working with Fireblocks, Solana Japan, and TIS Inc (IT services provider) to launch a yen-backed stablecoin on the Solana blockchain and allow users to pay at shops, send money abroad, or buy digital assets. Fireblocks will handle custody, TIS will manage backend integration, while Progmat Coin, a platform backed by Japan’s largest banks, will ensure compliance.
Think of this stablecoin as programmable cash, legal, instant, and always available.
Japan is one of the few countries to give stablecoins a clear legal framework. For perspective Under a 2023 law, Payment Services Act, only licensed banks and trust companies can issue fiat-backed stablecoins. These tokens must be backed 1:1 with yen, redeemable on demand, and held under strict custody rules.
This makes Minna’s project different from private stablecoins like USDT or USDC, which are issued by companies overseas and not legally recognised in Japan. In contrast, Minna’s stablecoin is being built inside the existing digital payment system. It will function like digital cash, issued by a regulated bank, but with a twist.
This stablecoin will run on Solana, known for sub-second finality and ultra-low fees (less than $0.0003 per transaction).
Solana currently finalises blocks in about 400 milliseconds (ms), and with its upcoming 'Alpenglow' consensus upgrade, this is expected to drop to as low as 100 ms. The upgrade reduces validator messaging overhead and speeds up confirmation times, enabling real-time payments 24/7 without the delays or costs of legacy rails that the banking network has been using all this while.
For a ramen shop owner in Fukuoka, a yen-backed stablecoin could cut payment fees from 3% to almost zero. Credit cards and QR code apps like PayPay, Japan’s largest mobile payment app, are popular but still charge merchants ~1.5% in fees. In the case of credit cards, the settlement time is more than 24 hours. Meanwhile, cash transactions are settled instantly. That’s why many small businesses in Japan still remain cash-only. But transacting with cash doesn’t help with traceability. It is also inconvenient to carry it in its physical form and this is where the case for comfort and convenience is built.
With stablecoins, they could receive payments instantly, at a fraction of the cost.
For a freelancer in the Philippines working with a Japanese client, stablecoins could turn a three-day, $23 SWIFT transfer into a near-instant settlement that costs almost nothing. The remittance market is also huge with global fees exceeding $50 billion at over 6% cost of sending the funds across borders. Cutting even a slice of this cost using blockchain-based yen could save billions.
As for young users who already live on their phones, it could mean sending, spending, and saving money across apps and markets without ever touching a bank branch or hard cash. Over 70% of Minna’s 1.3 million users are aged 15-39 and mobile-native. This coin meets them where they already are.
If successful, it could provide a model for other countries. Instead of building expensive government blockchains, they could issue bank coins on existing public networks that are fast, cheap, and safe. This kind of gambit sets Japan apart since it’s not betting on an abstract CBDC that might arrive years later.
The economic case is straightforward.
Compared to the current system, Zengin transfers, the Japanese payment clearing network, cost $1.35-$4 and settle during banking hours. Credit cards take one to two days to settle and charge merchants 2.5-5%. SWIFT transfers can take three days and cost at least $25 per transaction. Stablecoins on Solana settle in under 1 second and cost ~$0.0003.
Sending $70 via credit card could cost the merchant $2. The same transaction with a stablecoin? Less than $0.007. That’s over 99% in savings. Multiply that across Japan’s $1.8 trillion retail market and cross-border flows, and the potential savings run into billions. Even if a modest 5-10% of this market moves on-chain, it could translate to a savings of roughly $1.8-$3.6 billion. In liquidity alone, stablecoins could free up trillions locked in delayed settlements.
There are trade-offs.
Stablecoins don’t offer the same protections as cards: no chargebacks, no fraud resolution. If you send funds to the wrong wallet, they're likely gone. That’s why user-friendly wallets and KYC are essential.
Japan’s regulators are attempting to fix these bottlenecks.
Every user will be verified. Every coin will be traceable. They are also capping non-bank issuers' processing power to ¥1 million (~$6,700) per transfer. But Minna, as a licensed bank, may have more room to grow.
Adoption is likely to be a pressing problem.
Will consumers trust it? Will merchants accept it? That depends on experience. If the UX is smooth and the benefits are clear, adoption could follow the same curve as PayPay, which went from zero to millions of users in under a year.
Japan’s three megabanks are already watching closely. SMBC is testing its own stablecoin on Avalanche.
And with interoperability between these coins, Japan could have a unified digital yen ecosystem that’s bank-led, not state-run.
The beauty of Minna’s stablecoin is that users may never know it's crypto. They’ll just know their money moved instantly, without fees, and with lower cost. They’ll tap, scan, or send – and it’ll just work.
Which is exactly how payments should feel.
Read: The Payments Party 🏦
That’s the bigger story here. More than a digital yen and a blockchain experiment, it will be more interesting to see how this will make money move better and more efficiently. If successful, it could shape how banks, payments infrastructure providers and crypto engage together across the globe, not just in Japan.
And maybe, the next time you walk into that Tokyo cafe, the sign won’t say "Cash Only."
That's it for today. See ya tomorrow.
Until then … stay curious,
Prathik
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