Japan is preparing to greenlight its first yen-denominated stablecoin this autumn, marking a big step in the country’s approach to digital assets and cross-border payments, Nikkei reported Monday.
The Financial Services Agency is expected to approve issuance of the stablecoin as early as October, with the token aimed at uses ranging from international remittances to corporate settlements.
Tokyo-based fintech company JPYC will spearhead the launch. The firm plans to register as a money transfer business within the month, paving the way for sales to begin soon after. The stablecoin, also called JPYC, will maintain its peg to the yen through reserves of highly liquid assets, including deposits and government bonds.
Institutional Capital Eyes JPYC for Carry Trades
Individuals, businesses and institutional investors will be able to purchase JPYC once registration is complete. Buyers will make payments that are then converted into digital tokens, which will be transferred into electronic wallets.
Potential uses include sending money to students abroad, facilitating cross-border corporate payments and enabling participation in decentralized finance.
The company’s goal is ambitious. Over the next three years, it intends to issue 1 trillion yen worth of JPYC, equal to about $6.8b at today’s exchange rate of 147.37 yen to the dollar.
Interest has already emerged from hedge funds active in cryptocurrencies and family offices managing the assets of wealthy investors.
Stablecoin Oversight Positions Japan as Industry Pioneer
Market participants expect the token to support strategies such as carry trades, which exploit interest rate differentials across currencies. The timing coincides with rising global attention on stablecoins, whose total market capitalization recently surpassed $250b, dominated by dollar-backed tokens.
Japan revised its legal framework in June 2023 to clarify the status of stablecoins. Under the new rules, these tokens are defined as “currency-denominated assets” and can only be issued by banks, trust companies and registered money transfer businesses. That distinction sets them apart from other cryptocurrencies and is intended to provide stronger investor protections.
JPYC’s launch shows how Japan’s regulatory clarity has positioned the country as a pioneer in digital asset oversight. Analysts say this foundation gives firms a more predictable environment to experiment with blockchain-based payments and settlement systems.
Remittances and DeFi Fuel Stablecoin Adoption
Stablecoins are now a crucial bridge between traditional finance and the digital asset economy. For instance, tokens like USDT from Tether and USDC from Circle dominate trading pairs on crypto exchanges. Moreover, they are widely used for remittances and decentralized finance.
Citigroup has projected that the stablecoin market could expand to as much as $3.7 trillion by 2030, more than ten times its current size. That outlook suggests yen-pegged offerings could carve out a niche as Asian investors seek alternatives to dollar-denominated tokens.
The Japanese initiative arrives as governments worldwide step up their scrutiny of stablecoins.
Policymakers remain concerned about potential risks to financial stability, but the structured approach taken in Tokyo may ease those worries while opening doors for innovation.
If JPYC gains traction, it could set a precedent for other non-dollar stablecoins. In turn, this may encourage broader adoption across Asia. For Japan, the launch marks a domestic milestone. At the same time, it offers the country a chance to strengthen its influence in the fast-changing digital currency landscape.
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