Japan has launched JPYC, its first legally recognized yen-denominated stablecoin, aiming to cement its leadership in regulated digital finance and expand the yen’s utility in global transactions.
The debut of JPYC, announced by Japanese fintech firm JPYC Inc., positions the nation at the forefront of the digital asset landscape. It operates on multiple blockchains, including Ethereum, Polygon, and Avalanche.
The stablecoin is fully backed by deposits of yen and Japanese government bonds (JGBs). This ensures a fixed value, with each JPYC token equaling one Japanese yen.
This move aligns with Japan’s Payment Services Act reforms enacted in June 2023. These regulations require stablecoin issuers to register under relevant financial laws, ensuring market stability and robust oversight.
JPYC Inc. completed its registration as a fund transfer service provider with the Financial Services Agency (FSA) in August. This compliance marks a significant step in balancing innovation with security within the crypto sector.
Unlike many stablecoins in Asia that face capital controls or restrictions on use, JPYC leverages the yen’s free convertibility. This allows for its unlimited circulation in international markets.
This global accessibility is critical for fostering an on-chain market for the USD/JPY pair, one of the world’s most active currency exchanges. JPYC aims to offer transactions that are both rapid and low-cost, with fees potentially amounting to fractions of a cent for global transfers.
The JPYC EX platform facilitates the non-custodial issuance and redemption of tokens. Users maintain complete control over their assets.
JPYC Inc. plans to generate revenue from the interest yielded by the underlying Japanese government bonds, rather than charging transaction fees. “We will not charge transaction fees; instead, we will generate income through the interest on Japanese Government Bonds,” a company representative stated.
To acquire JPYC, users must complete a quick identity verification process using Japan’s national identity card. Once issued, tokens are immediately usable for payments, remittances, or integration into various financial services without peer-to-peer transfer limits.
JPYC enters a global foreign exchange market that averages $7 trillion in daily trading volumes. Analysts anticipate the stablecoin could boost crypto settlements across Asia and contribute to a multi-currency stablecoin economy, facilitating decentralized trading alongside tokens like USDT.
Domestic adoption has already begun. Companies such as Densan System plan to integrate JPYC into retail and e-commerce payment systems. Asteria, a software provider for data integration, will also add native functionalities.
The crypto wallet HashPort will support transactions with the new token. However, competition is expected to intensify, with major institutions like SMBC also developing their own stablecoins.
JPYC Inc. has set an ambitious goal: to achieve 10 trillion yen (approximately $65.4 billion) in circulation within three years. This target significantly exceeds the current market capitalization of euro-linked stablecoins, which stand at hundreds of millions of dollars.
The company plans to expand compatible blockchains and forge additional business alliances to reach this objective. Its launch also validates Japan’s comprehensive regulatory framework, supported by memberships in industry associations like the Blockchain Promotion Association and the Japan Cryptocurrency Business Association.
The Bank of Japan, which advocates for the international use of its currency, may see JPYC as an effective tool for facilitating cross-border payments. The debut represents a milestone for a yen-linked stablecoin with true global aspirations, challenging the dollar’s dominance in the digital asset space.