Japan’s Financial Services Agency (FSA) has moved to approve the country’s first yen-backed stablecoin, clearing the way for JPYC to issue a digital currency pegged to the JPY.
The step will mark the first time a domestically issued stablecoin tied to the yen becomes available, following a regulatory framework introduced last year.
JPYC, a fintech based in Tokyo, will register as a money transfer business before issuing the currency. Each token is designed to hold a one-to-one value with the Japanese yen, underpinned by reserves including commercial bank deposits and Japanese government bonds. The company plans to distribute the stablecoin through bank transfers, allowing both individuals and firms to receive tokens in digital wallets after purchase.
Implications for the bond market
Representatives from JPYC have argued that the new currency could affect Japan’s bond market. They highlighted that in the United States, stablecoin issuers have become significant buyers of US Treasuries to secure their tokens. A comparable trend in Japan, they suggested, might add to demand for Japanese government bonds if yen-based stablecoins see widespread uptake.
They also noted that governments that delay in developing stablecoin markets may face higher borrowing costs, as they could miss out on new sources of demand for sovereign debt. For Japan, the upcoming approval is therefore seen as not only a step toward regulating digital assets but also as part of a wider financial policy discussion.
The global stablecoin market has expanded rapidly, now exceeding USD 286 billion, with dollar-linked tokens such as Tether’s USDt and Circle’s USDC dominating. US dollar stablecoins are already accessible in Japan, but JPYC would be the first yen-denominated option.
Earlier this year, Circle received clearance to introduce USDC in Japan via SBI VC Trade, an exchange run under SBI Holdings. That marked the first time a foreign-issued stablecoin was approved by the FSA, with plans to extend availability to additional Japanese platforms.
