Regulators, Not Coins, Shape the Future of Stablecoin Markets

Japan introduced the world’s first comprehensive stablecoin regulatory framework in 2023 under amendments to its Payment Services Act, granting only licensed banks and trust institutions the right to issue stablecoins. Despite this early regulatory clarity, the country has yet to see widespread adoption of yen-backed stablecoins. While licensed issuers exist in theory, a thriving yen-stablecoin economy has not materialized. Takashi Tezuka, country manager at Web3 infrastructure developer Startale Group, attributed this to Japan’s regulatory philosophy, which prioritizes systemic stability over rapid innovation. In contrast, the U.S. approach under the recently enacted GENIUS Act opens stablecoin issuance to both banks and federally licensed non-banks, fostering broader market participation and potentially accelerating adoption [4].

The U.S. has taken a more expansive approach to stablecoin regulation with the passage of the GENIUS Act, which establishes federal standards for stablecoin operations and paves the way for major companies to enter the space. The legislation sets a framework for regulated stablecoin issuance, including requirements for reserve backing and compliance with anti-money laundering standards. It also mandates public comment and research on innovative methods to detect illicit financial activity involving digital assets. The U.S. Department of the Treasury is currently seeking input on the use of technologies such as AI, APIs, and digital identity verification to mitigate financial crime risks. The results of this research, expected by 2028, will inform further regulatory guidance and standards [2].

The regulatory divergence between Japan and the U.S. is reflected in market dynamics. While Japan has laid the groundwork for stablecoin issuance, the U.S. is seeing a surge in corporate interest. Reports indicate that major firms such as Apple, Amazon, and Walmart are exploring the launch of their own stablecoins, signaling a potential shift toward broader adoption of digital currencies in everyday transactions. The U.S. market’s openness to non-bank participants is seen as a key factor in this momentum. Meanwhile, Japan’s infrastructure-first approach, though slower to deliver results, positions the country to compete as global stablecoin markets mature [4].

Japan is, however, making incremental progress toward launching its first yen-backed stablecoin. Local fintech firm JPYC is reportedly close to securing regulatory approval for a fully collateralized stablecoin backed by bank deposits and Japanese government bonds. Monex Group, a major financial services company, is also considering entering the space with a yen-pegged stablecoin, potentially leveraging its existing crypto exchange, Coincheck, to support the initiative. These developments mark the yen’s long-awaited entry into the global stablecoin market, which is currently dominated by U.S. dollar-backed tokens such as Tether’s USDT and Circle’s USDC [4].

The U.S. is also witnessing growing competition in stablecoin distribution. Ripple, for example, has partnered with Japan’s SBI Holdings to launch its Ripple USD (RLUSD) stablecoin in Japan by early 2026. This move follows Japan’s 2023 regulatory approval of stablecoin operations and reflects broader global interest in the asset class. RLUSD will be fully backed by U.S. dollar deposits and short-term treasuries and will be distributed exclusively by SBI VC Trade, a licensed electronic payment instruments exchange service provider. This partnership is expected to expand the availability of stablecoins in Japan while reinforcing Ripple’s presence in the Asia-Pacific region [6].

As the U.S. and Japan continue to shape their stablecoin ecosystems, the broader implications for global financial infrastructure are becoming clear. Stablecoins are increasingly seen as a bridge between traditional finance and digital assets, offering faster, cheaper, and more efficient cross-border payments. However, challenges remain, including concerns around consumer privacy, fraud protection, and systemic risks if a major stablecoin issuer fails. Both countries are navigating these complexities, with the U.S. emphasizing speed and market access, and Japan focusing on stability and institutional readiness [3].

Source:

[1] Stablecoin summer (https://www.goldmansachs.com/insights/top-of-mind/stablecoin-summer)

[2] Public Comment Begins Under the GENIUS Act: Treasury ... (https://www.wsgr.com/en/insights/Public-Comment-Begins-Under-the-GENIUS-Act-Treasury-Seeks-Comment-on-Detecting-Illicit-Activity-Involving-Digital-Assets.html)

[3] Congress passes 'Genius Act,' paving way for regulated ... (https://www.nbcmiami.com/news/local/congress-passes-genius-act-paving-way-for-regulated-stablecoins/3681903/)

[4] Japan's Stablecoin Laws Came First, but US Gains ... (https://cointelegraph.com/news/japan-wrotejapan-stablecoin-laws-vs-us-genius-act-adoption-gapthe-first-stablecoin-rulebook-so-why-is-the-us-pulling-ahead)

[5] Japan's Monex Group considers launching yen-pegged ... (https://cointelegraph.com/news/japan-monex-group-considers-launching-yen-pegged-stablecoin)

[6] Ripple and SBI to launch RLUSD stablecoin in Japan by ... (https://thedigitalbanker.com/ripple-and-sbi-to-launch-rlusd-stablecoin-in-japan-by-2026/)