1. The Reason for "Integration with On-Chain Finance"
Facing the risk of deposit outflows, banks are leveraging Japan's unique trust system to retain funds under their management while stepping into on-chain finance as a defensive measure, such as issuing stablecoins.
2. Adapting to the Next-Generation Customer: "AI Agents"
The primary reason for the rush towards on-chain finance is to welcome AI agents, which autonomously conduct transactions 24/7, as a new customer base, necessitating a departure from traditional business hours and human-centric financial infrastructure.
3. New Financial Infrastructure and Regional Economic Transformation
Amid expectations of 24/7 payment infrastructure and friction with existing systems, regional banks are looking to leverage blockchain to regain control over payment fees through the tokenization of local currencies and assets, creating new revenue streams.
The core business of banks is not merely to hold money. It is to lend out the deposits they gather and earn interest margins. This is why banks have established branches, offered interest rates, and employed various strategies to attract deposits. For over a century, this premise has remained unquestioned.
However, with the proliferation of blockchain technology, a path is opening for deposits to move outside of banks. Stablecoins, which are pegged to the value of fiat currency, operate 24/7 and can be transferred without going through bank accounts. If they become the mainstay of payments, people might only keep the necessary amount in banks, leading to a contraction of the banks' financial base.
In essence, on-chain finance is not something banks would typically welcome. It is traditionally seen as a competitor that could erode their business.
Despite this, Japanese banks are now stepping into on-chain finance. Why are they reaching out to a technology that should be adversarial? The reasons are more complex than they appear from the outside. Let's first review the events of 2026.
