Stablecoin Volumes Surge to Record $33 Trillion Amid Policy Tailwinds

Stablecoin transaction volumes have reached a record $33 trillion, driven by favorable policy developments and increased institutional adoption. Japan, in particular, is playing a pivotal role in this shift, with recent regulatory changes reshaping the landscape for cryptoassets and stablecoins. The country's financial authorities are positioning digital assets as mainstream investment vehicles, aligning them with traditional securities frameworks.

Japan's Financial Services Agency (FSA) has reclassified 105 major cryptoassets as financial products under the Financial Instruments and Exchange Act. This move shifts them away from the lighter Payment Services Act regime and into the same legal category as stocks and bonds. The change mandates greater transparency and compliance for exchanges listing these assets. The FSA also announced a 20% tax rate on eligible crypto income, a significant reduction from previous rates as high as 55%.

The reclassification and tax changes are creating institutional pathways for crypto exposure in Japan. With the regulatory framework aligning with traditional financial markets, exchanges and institutional players can now treat leading cryptoassets like mainstream investable assets.

This shift is expected to facilitate deeper market participation and broader adoption among institutional investors.

XRP has emerged as a dominant asset within this evolving landscape. Japanese investors have funneled $21.7 billion into XRP through JPY on-ramps, far exceeding the inflows for Bitcoin and other major cryptocurrencies. This dominance is attributed to Ripple's strategic partnership with SBI Holdings, which has integrated XRP into several remittance corridors.

Why Did This Happen?

Japan's regulatory environment is shifting to accommodate digital assets as part of its broader financial infrastructure. The FSA's reclassification of cryptoassets as financial products is a key driver of this transition. It allows exchanges to operate under familiar compliance frameworks, making it easier for institutional investors to engage with the market.

In addition to reclassification, Japan's tax reform plays a critical role. By reducing the effective tax rate on crypto income to 20%, the government is encouraging broader participation in the digital asset market. This rate aligns with the taxation of traditional equity investments, further normalizing crypto as a financial product.

The regulatory changes have had a measurable impact on transaction volumes. Chainalysis data shows that Japan's on-chain value received grew by 120% in the year to June 2025, outpacing several other major markets in Asia. XRP has particularly benefited from this growth, with significant inflows through centralized exchanges and remittance corridors.

SBI Remit, a subsidiary of SBI Holdings, has been a key player in this shift. Since 2017, the company has used Ripple's XRP for cross-border payments, expanding its use to multiple countries in Asia. These real-world applications are reinforcing XRP's role in Japan's financial infrastructure.

What Are Analysts Watching Next?

Analysts are closely monitoring how institutional adoption will evolve in Japan. The FSA's regulatory changes are expected to unlock new investment products, including exchange-traded funds (ETFs) and structured notes backed by cryptoassets. SBI has already announced plans to launch a dual-asset ETF pairing Bitcoin and XRP, pending regulatory approval.

The integration of XRP into Japan's financial ecosystem is also being watched closely. Ripple's partnership with SBI VC Trade to distribute the RLUSD stablecoin is a key development. This initiative aims to expand institutional access to stablecoins while ensuring compliance with regulatory requirements.

Regulators are also assessing the long-term implications of these changes. The shift in policy is not only about encouraging investment but also about ensuring that Japan remains competitive in the global digital asset market. With the country positioning itself as a leader in digital finance, the impact on other Asian markets is expected to be significant.