Japan Approves First Yen-Backed Stablecoin JPYC by Fall 2025

Japan’s Financial Services Agency (FSA) is set to approve the country’s first yen-backed stablecoin, JPYC, in the coming months, signaling a major advancement in Japan’s digital asset regulatory landscape. The fintech company JPYC Inc., based in Tokyo, will lead the issuance of the stablecoin, which will be fully collateralized by yen-denominated assets, including bank deposits and government bonds [1]. This development is expected to occur by fall 2025 and marks a key step in Japan’s integration of stablecoins into its financial system [2].

JPYC is structured to maintain a 1:1 peg with the Japanese yen, ensuring price stability while leveraging the speed and transparency of blockchain technology. The FSA’s regulatory oversight ensures that the stablecoin operates within a well-defined legal framework, which is expected to foster trust among institutional and retail investors alike. The token will be issued through digital wallets, with users transferring yen funds via bank accounts. The revised Payment Services Act designates JPYC as a currency-denominated asset, distinguishing it from virtual currencies and aligning it with broader financial regulations [3].

Analysts suggest that the approval of JPYC could significantly increase demand for Japanese government bonds (JGBs), which will be used as collateral for the stablecoin’s reserves [5]. This shift could enhance the liquidity of the JGB market and reduce borrowing costs for the government, similar to how U.S. dollar-backed stablecoins hold substantial U.S. Treasury securities. JPYC has set an ambitious target of issuing ¥1 trillion in tokens within three years, which could further amplify its impact on Japan’s financial markets [6].

The FSA’s move reflects a broader global trend of financial regulators embracing stablecoins while maintaining control over their risks. While dollar-pegged stablecoins such as USDT and USDC already operate in Japan, JPYC will be the first stablecoin tied to the yen [4]. This development underscores Japan’s proactive approach to digital asset regulation and positions it as a potential model for other nations seeking to balance innovation with financial stability [7].

By introducing a domestically issued yen-backed stablecoin, Japan aims to enhance the efficiency of cross-border transactions, reduce dependency on foreign digital currencies, and strengthen its domestic digital asset industry. The approval of JPYC is not just a regulatory milestone but also a strategic economic decision that could influence the evolution of digital finance in Asia and beyond [8].

Source:

[1] https://www.coindesk.com/policy/2025/08/18/japan-s-financial-regulator-to-approve-first-yen-denominated-stablecoin-report

[2] https://www.ainvest.com/news/japan-approves-yen-backed-stablecoin-fall-2025-launch-2508/

[3] https://coincentral.com/why-japans-new-yen-stablecoin-matters-for-global-crypto-markets/

[4] https://www.tradingview.com/news/cryptonews:8fa8afe28094b:0-japan-prepares-to-approve-first-yen-backed-stablecoin-this-autumn-report/

[5] https://cointelegraph.com/news/japan-approves-first-yen-stablecoin-jpyc

[6] https://blockchain.news/flashnews/japan-fsa-set-to-approve-first-yen-backed-stablecoin-jpyc-jpyc-trading-watch-on-jpy-liquidity-btc-jpy-and-eth-jpy

[7] https://www.techinasia.com/news/japan-to-approve-countrys-first-yen-pegged-stablecoin-report

[8] https://www.ainvest.com/news/japan-launch-domestic-yen-backed-stablecoin-jpyc-fall-2025-2508/