Japan to Issue Its First Yen Stablecoin as JPYC Seeks Approval

TLDR

Table of Contents

JPYC is Japan’s first yen-backed stablecoin and will support corporate payments and remittances.
JPYC aims to issue $6.78 billion worth of stablecoins over the next three years.
The approval is part of Japan’s broader strategy to regulate stablecoins and enhance financial innovation.
The issuance could reshape the demand for Japanese government bonds as stablecoins gain traction.

Japan is on the verge of approving its first yen-denominated stablecoin, JPYC, by the fall of 2025. The country’s Financial Services Agency (FSA) is preparing to grant the fintech firm JPYC approval to issue its yen-backed stablecoin. This approval marks a significant milestone in Japan’s stablecoin regulatory framework, making JPYC the first stablecoin linked to the Japanese currency.

JPYC will maintain a fixed value of 1 JPY = 1 yen, and it will be backed by highly liquid assets, such as Japanese government bonds and bank deposits. The stablecoin aims to target several financial services, including international remittances, corporate payments, and decentralized finance (DeFi). This initiative could position Japan as a leader in the stablecoin market in Asia.

JPYC’s Strategic Launch and Market Goals

JPYC, the Tokyo-based fintech company behind the stablecoin, plans to register as a money transfer business with the FSA in August 2025. Following registration, the company expects to initiate the token sale shortly thereafter. The company has set an ambitious goal to issue 1 trillion yen (approximately $6.78 billion) worth of its stablecoin over the next three years.

With a growing interest from hedge funds and corporate clients, JPYC is poised to establish a strong presence in both Japan and international markets.

“JPYC will start issuing stablecoins backed by high-liquidity assets to provide real-time financial solutions,” said a company representative. The firm anticipates that the stablecoin could play a significant role in improving financial infrastructure and supporting cross-border transactions in Japan.

Potential Impact on Japan’s Financial Landscape

The introduction of JPYC could alter the dynamics of Japan’s financial market, especially regarding government bonds. In a post on social media, Okabe, a representative from JPYC, noted that if the stablecoin sees widespread adoption, it could significantly impact Japan’s bond market.

He highlighted that stablecoin issuers in other countries, such as the US, have become major buyers of Treasury bonds, and a similar trend could emerge in Japan with JPYC.

Japan’s bond market could see increased demand for Japanese government bonds (JGBs) if JPYC’s stablecoin is widely adopted. This could result in a potential shift in how institutional investors view JGBs, leading to enhanced liquidity in the market. Furthermore, countries that lag in stablecoin development risk missing out on institutional demand, which could influence government bond interest rates in the long term.

Regulatory Framework and Future Outlook for Stablecoins in Japan

Japan has been proactive in regulating stablecoins to ensure that the sector develops in a controlled and secure manner. The country passed amendments to the Payment Services Act in June 2022, recognizing fiat-pegged stablecoins as “Electronic Payment Instruments.”

The updated regulation requires that only licensed banks, trust companies, and service providers can issue stablecoins.

This regulatory clarity has encouraged financial institutions to explore stablecoin projects, including Sumitomo Mitsui Financial Group (SMBC), Japan’s second-largest bank. SMBC has also partnered with Ava Labs and Fireblocks to launch a stablecoin, underscoring Japan’s broader strategy to integrate digital currencies into its financial ecosystem.

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