Japan Post Bank to Launch Digital Currency Amid Market Pressure

TLDR

Table of Contents

Japan Post Bank will launch DCJPY in FY2026, linking over 120 million accounts.
DCJPY will be pegged 1:1 to the yen and enable instant savings-to-token conversion.
Japan’s 30-year bond yield rose to 3.19% as institutional demand declined sharply.
The tokenized asset market is projected to reach $18.9 trillion by 2033.

Japan Post Bank is preparing a major shift toward digital finance as Japan’s bond market faces mounting pressure. The bank will launch a digital currency, DCJPY, in fiscal 2026 to modernize its services and provide faster access to blockchain-based products. With over 120 million accounts, the bank seeks to reduce reliance on traditional bonds, which are losing demand among institutional investors.

DCJPY to Link Savings with Tokenized Assets

Japan Post Bank will introduce DCJPY, a digital currency pegged to the yen, developed by Tokyo-based DeCurret DCP. The new currency will allow users to convert bank savings into digital assets instantly through a mobile application. Depositors will be able to purchase tokenized financial products, including security tokens and bonds, which offer estimated returns between 3% and 5%.

This shift comes as Japan’s Financial Services Agency pushes for better regulation in the crypto and digital finance space. The bank plans to integrate all its 120 million accounts into the system, enabling large-scale access to tokenized markets. According to a joint report by Boston Consulting Group and Ripple, the tokenized real-world asset market is expected to grow from $600 billion in 2025 to $18.9 trillion by 2033.

The bank is also exploring how DCJPY could support local governments. DeCurret DCP is in discussions with regional authorities to allow them to distribute subsidies and grants via DCJPY. This would automate public payments and reduce processing time, though implementation will depend on demand from those governments.

Bond Market Weakens as Institutions Exit

Japan’s bond market is under strain as institutional investors pull back from long-term Japanese Government Bonds (JGBs). Major insurers have sold more 20-, 30-, and 40-year bonds in 2025, becoming net sellers for the first time. Trust banks, which manage pension funds, bought just 1.47 trillion yen in long-term bonds during the first seven months of 2025, down 34% from the five-year average.

The reduced demand has pushed yields to multi-year highs. The 30-year JGB yield climbed to 3.19%, nearing record levels, while the 10-year yield rose to 1.625%. japans Nikkei 225 index also fell to a three-week low as investor confidence weakened. Analysts say that long-dated JGBs are becoming less attractive due to rising global interest rates and limited returns.

With traditional bond demand falling, financial institutions like Japan Post Bank are turning toward digital and tokenized markets. The move reflects a broader trend in Japan, where technology is reshaping how value is stored and transferred in the financial system.

Preparing for a Tokenized Future

Japan Post Bank’s digital currency plan is part of a wider effort to increase liquidity and enable faster financial settlements. Users will be able to trade digital assets, including non-fungible tokens (NFTs) and tokenized bonds, directly from their savings accounts. This could make transactions faster and reduce reliance on intermediaries.

The project also aligns with broader developments in Japan’s digital economy. Companies such as Metaplanet are continuing to buy Bitcoin, signaling a growing interest in blockchain-based assets. Although the crypto market remains volatile, interest in secure, regulated digital currencies like DCJPY appears to be growing.

The bank says it will closely monitor public and institutional feedback before expanding the use of DCJPY. It plans to adjust its features depending on how both users and local governments respond during the initial rollout phase.

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