The Current Global Navigation Satellite System (GNSS) carry atomic clocks such as rubidium atomic clocks and hydrogen masers that provide precise timing for ranging measurements. Optical clocks have evolved, use frequencies much higher than a few THz, and are more stable than microwave atomic clocks. The Japan Aerospace Exploration Agency (JAXA) and the University of Electro-Communications (UEC) have researched laser-optical clocks for use in space and developed a system named the Iodine Photonic Local Oscillator System (IPLOS). We expect that once this system is fully completed, it will realize highly accurate positioning, navigation and timing using GNSS. IPLOS consists of a mode-locked laser and an iodine-stabilized laser, but there are no products for space yet. Thus, we engineered prototypes of IPLOS and conducted space environmental tests (e.g., disturbance test, thermal vacuum test). This paper describes our current progress in developing laser-optical clocks and our scheme for the future Quasi-Zenith Satellite System (QZSS). We also conducted simulations to evaluate the impact on SIS-URE when replacing the clocks on seven future QZSS satellites with highly stable IPLOS. Our simulations showed experimentally that SIS-URE could be improved with IPLOS even when extending the validation period of the broadcast ephemerides. This improvement would enhance the usability of navigation and positioning using QZSS.