Japan’s JPYC Stablecoin Could Reshape Global Yen Payments

Japan is set to issue its first regulated stablecoin pegged to the yen later this year, marking a significant development in the nation’s evolving digital finance landscape. The startup behind the initiative, JPYC Inc., has been granted a funds transfer service provider license by the Financial Services Agency (FSA), a prerequisite for launching the stablecoin. The company intends to issue the token—also named JPYC—around autumn, maintaining a fixed 1:1 ratio with the Japanese yen and backed by liquid assets such as domestic savings and Japanese government bonds (JGBs) [4]. CEO Noritaka Okabe noted that the stablecoin will be initially adopted by institutional investors, hedge funds, and family offices in Japan, with ambitions to expand its use internationally as a form of digital yen [1].

JPYC’s model is designed to generate revenue through interest earned on its JGB holdings, rather than through transaction fees. This approach mirrors strategies employed by major stablecoin issuers in the U.S., where tokens such as Tether’s USDT and Circle’s USDC are backed by a combination of cash and short-term government securities. The move could influence Japan’s bond market dynamics, with Okabe suggesting that widespread adoption of the stablecoin could boost demand for JGBs, similar to the role stablecoins have played in the U.S. by becoming major buyers of Treasurys [3].

The development is part of a broader global trend in stablecoin adoption and regulation. In the U.S., federal rules for stablecoins were recently enacted, while in Hong Kong, new licensing regimes have been introduced. Meanwhile, mainland China has taken a stricter approach, banning crypto trading and asking local brokers to cease promoting stablecoin research. Japan’s regulatory framework, which was finalized in June 2023, distinguishes three types of digital currencies, including those issued by funds transfer firms like JPYC and backed by bank deposits and government bonds [4].

The approval of a yen-pegged stablecoin could also enhance Japan’s role in international payments. Given that the yen is the fourth most widely used currency for cross-border transactions according to SWIFT data, a regulated yen stablecoin could facilitate faster and more efficient global transfers. JPYC’s stablecoin is expected to operate within the country’s Payment Services Act, which provides a legal foundation for its issuance and usage. The FSA has reportedly been reviewing the company’s application since earlier this year, with the Nikkei reporting in August that approval was anticipated by October [4].

The launch of JPYC represents a strategic step in Japan’s broader digital finance strategy. The nation has already seen the introduction of U.S. dollar-backed stablecoins such as Circle’s USDC, which received regulatory approval earlier this year and is now listed on several major exchanges. The approval of a domestic yen-pegged token could encourage further innovation in the sector, with potential implications for monetary policy and institutional investment behavior [3]. As JPYC prepares for its market entry, it will be closely watched by investors and regulators alike for its impact on Japan’s financial system and global payments landscape.

Source:

[1] Reuters - Japan startup issue first yen-pegged stablecoin (https://www.reuters.com/sustainability/boards-policy-regulation/japan-startup-issue-first-yen-pegged-stablecoin-2025-08-19/)

[2] CoinDesk - Japan's regulator to approve first yen-denominated stablecoin (https://www.coindesk.com/policy/2025/08/18/japan-s-financial-regulator-to-approve-first-yen-denominated-stablecoin-report)

[3] Coin Telegraph - Japan approves first yen-stablecoin JPYC (https://cointelegraph.com/news/japan-approves-first-yen-stablecoin-jpyc)

[4] Ledger Insights - Japanese stablecoin issuer JPYC receives a license (https://www.ledgerinsights.com/japanese-stablecoin-issuer-jpyc-receives-a-license/)