Japan has launched world’s first fully yen-pegged stablecoin, marking a landmark step in the integration of blockchain technology into the mainstream financial system. The stablecoin, named JPYC, is issued by a Japanese fintech startup “JPYC Inc.”, and is fully backed by Japanese yen deposits and Japanese Government Bonds (JGBs).
About JPYC Stablecoin
- Issuer: JPYC Inc., a Japanese startup.
- Peg: 1 JPYC = ¥1 (Japanese yen).
- Backing: 100% collateralized by bank deposits and Japanese Government Bonds (JGBs).
- Technology Base: Blockchain-based digital asset (built on the same distributed ledger technology as cryptocurrencies).
- Convertibility: Fully convertible to yen.
- Launch Significance: The world’s first legally compliant, fully yen-backed stablecoin under Japan’s 2023 digital asset laws.
Purpose and Vision
- To provide a fast, low-cost, and secure digital payment alternative to traditional systems.
- To promote cashless transactions in a traditionally cash-dominant economy.
- To eventually make JPYC a global payment instrument, supporting cross-border settlements.
Issuance & Market Ambition
- JPYC plans to issue up to 10 trillion yen (≈ USD 66 billion) worth of stablecoins in three years.
- Initial strategy:
- No transaction fees to encourage usage.
- Revenue generation through interest from JGB holdings.
- Target audience: Domestic consumers, overseas users, and digital payment service providers.
Features of JPYC
| Feature | Description |
| Peg Type | Fully pegged to Japanese Yen (¥1 = 1 JPYC) |
| Collateral | Bank deposits + Japanese Government Bonds |
| Blockchain Type | Public blockchain (decentralized ledger) |
| Transaction Speed | Near-instant (under 1 second) |
| Cost Efficiency | Transfers for less than 1 yen |
| Transparency | Regulated under Japan’s 2023 stablecoin framework |
| Revenue Model | Earnings from JGB interest, not transaction fees |
Global and Domestic Context
Stablecoin Landscape
- Global issuance volume (2025): $280 billion (up from $200B at the start of the year and $28B in 2020).
- Market dominance: USD-backed stablecoins account for 99% of global supply (as per BIS).
- New players:
- U.S.: GENIUS Act (2025) — a national framework for stablecoins.
- China: Exploring yuan-backed stablecoins.
- South Korea: Planning to issue won-based stablecoins.
Japan’s Policy Shift
- Japan amended its Payment Services Act (2023) to allow issuance of regulated stablecoins.
- The Financial Services Agency (FSA) oversees the compliance of stablecoin issuers.
- Japan’s three megabanks– Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho — are collaborating to issue their own stablecoins, potentially mainstreaming digital yen.
Background: Why This Launch Matters
- Japan has long been a cash-reliant society, but cashless payments have risen to 42.8% in 2024 (from 13.2% in 2010).
- The JPYC launch represents a pivotal step in Japan’s digital currency transformation.
- It also signals Asia’s growing participation in regulated stablecoin ecosystems, previously dominated by U.S. dollar assets.
Benefits of JPYC Stablecoin
- Faster Transactions: Instant peer-to-peer transfers globally without intermediaries.
- Lower Cost: Transaction fees as low as < ¥1 per transfer.
- Secure & Transparent: 100% collateralized with traditional assets.
- Boosts Financial Inclusion: Provides a digital payment option for individuals and SMEs.
- Cross-Border Potential: Can streamline international remittances and trade settlements.
Challenges and Regulatory Concerns
- Regulatory oversight: Ensuring transparency and audit of collateralized assets.
- Financial system risks: Potential to move funds outside regulated banking channels.
- Banking impact: Could weaken the role of commercial banks in payment flows if adoption grows rapidly.
- Market adoption: While promising, mass usage in Japan may take 3+ years due to cultural reliance on cash.
Global Context: Stablecoin Developments
| Country | Key Development | Note |
| United States | GENIUS Act (2025) to regulate and promote stablecoins | Supported by President Donald Trump |
| China | Considering digital yuan stablecoins | To complement CBDC (e-CNY) |
| South Korea | Plans for won-backed stablecoins | Similar to Japan’s approach |
| Japan | Launched JPYC | First fully yen-backed stablecoin |
Japanese Yen (¥)
- Currency code: JPY
- Issued by: Bank of Japan (BOJ)
- Introduced: 1871 under the New Currency Act
- Symbol: ¥
- Denominations: Coins (¥1–¥500), Notes (¥1,000–¥10,000)
Japanese Government Bonds (JGBs)
- Issuer: Ministry of Finance, Japan
- Type: Debt securities issued to finance public spending.
- Tenures: Short-term (T-Bills), Medium-term, and Long-term bonds.
- Investors: Domestic institutions and citizens (majorly held within Japan).
- Significance: Considered one of the safest sovereign bonds globally.
Stablecoin Basics
- Definition: A blockchain-based digital asset pegged to a stable asset (currency, commodity, or bond).
- Types:
- Fiat-backed: Supported by currency reserves (e.g., JPYC, USDC, Tether).
- Crypto-backed: Collateralized by other cryptocurrencies (e.g., DAI).
- Algorithmic: Value maintained via algorithmic supply-demand adjustments.
- Purpose: To reduce volatility compared to traditional cryptocurrencies like Bitcoin or Ethereum.
Japan’s Three Megabanks
- Mitsubishi UFJ Financial Group (MUFG)
- Sumitomo Mitsui Financial Group (SMFG)
- Mizuho Financial Group (MFG)
These banks play a key role in promoting digital yen initiatives and stablecoin development in Japan.
Significance
- The launch of JPYC stablecoin marks Japan’s official entry into the regulated digital currency space, creating a model for safe, asset-backed stablecoins.
- It combines financial stability (via JGB backing) with technological innovation (via blockchain).
- The move strengthens Japan’s ambition to lead Asia in digital finance innovation and to build a parallel payments infrastructure for the global economy.