- Trending
- Comments
- Latest
JPYC Inc. has launched Japan’s first fully regulated yen-backed stablecoin, beating the country’s three largest banks to market in what analysts are calling a ‘race for digital yen dominance.’
The Tokyo-based fintech’s stablecoin went live Monday with full backing from bank deposits and Japanese government bonds, while Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho prepare to launch their own competing tokens later this year.
The initiative represents a landmark in Japan’s transition toward regulated digital currency infrastructure and comes amid intensifying global competition in the stablecoin market, currently valued at over $308 billion.
Announcing the launch at a press conference in Tokyo, JPYC President Noriyoshi Okabe described the release of the yen-backed stablecoin as “a major milestone in the history of Japanese currency.” According to a report from Business Insider Japan, the stablecoin has already drawn interest from seven companies that plan to integrate it into their operations.
“The JPYC stablecoin represents a bridge between traditional finance and the emerging digital economy,” — Noriyoshi Okabe, President, JPYC Inc., during a Tokyo press briefing.
To support the rollout, JPYC also unveiled JPYC EX, a new platform designed specifically for issuing and redeeming the yen-backed stablecoin. The platform is regulated under Japan’s Act on Prevention of Transfer of Criminal Proceeds, ensuring strict identity verification and anti-money laundering compliance.
Through JPYC EX, users can deposit yen via bank transfer to receive the stablecoin directly to a registered wallet address. Conversely, users can redeem their tokens for yen, which will be credited to a verified withdrawal account. The company stated that its next goal is to “achieve an issuance balance of 10 trillion yen over the next three years” and to “create a new social infrastructure through stablecoins.”
The yen-backed stablecoin launch aligns with Japan’s broader regulatory reforms that encourage responsible crypto innovation while maintaining strong oversight. Japan’s Financial Services Agency (FSA) has taken a cautious but progressive approach, requiring all issuers of stablecoins to comply with strict capital, reserve, and transparency standards.
Japan’s stablecoin policy contrasts with that of the United States, where regulatory uncertainty has slowed adoption. The JPYC yen-backed stablecoin is seen as a pilot for how other major economies could digitize fiat currencies without fully adopting central bank digital currencies (CBDCs).
Japan’s framework for fiat-backed stablecoins could become a model for global regulation, — Kenji Hasegawa, Senior Analyst, Mitsubishi UFJ Research & Consulting, in an interview with Nikkei Asia.
Japan’s Ministry of Finance has also encouraged experimentation in blockchain-based financial services, and observers believe the yen-backed stablecoin may strengthen Tokyo’s role as a regional fintech hub.
JPYC’s move is expected to trigger a new wave of competition among Japanese financial institutions eager to issue their own yen-backed stablecoins. In August, Monex Group, another Tokyo-based financial services company, announced plans to launch a similar stablecoin.
Meanwhile, Japan’s three largest banks which are Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp (SMBC), and Mizuho Bank have revealed plans to jointly issue a yen-pegged stablecoin using MUFG’s Progmat platform, a blockchain-based infrastructure for tokenized financial products.
This trend signals the start of what some analysts call a “race for digital yen dominance.” Each institution aims to provide a compliant, efficient alternative to U.S. dollar stablecoins such as USDT (Tether) and USDC (Circle), which have already entered the Japanese market.
Domestic stablecoins like JPYC’s yen-backed model could help Japan reduce reliance on dollar-pegged assets and enhance financial sovereignty, — Aiko Tanaka, Research Fellow, Institute for Monetary Innovation, in a report to Tokyo Financial Review.
The emergence of the yen-backed stablecoin comes as Japan considers revising rules to allow banks to hold cryptocurrencies like Bitcoin for investment purposes as a sign of increasing institutional comfort with digital assets.
The Bank of Japan has also continued its research into a potential central bank digital currency (CBDC), though officials emphasize that stablecoins issued by private entities could coexist with any future digital yen.
As the yen-backed stablecoin ecosystem expands, analysts predict significant benefits for remittances, e-commerce, and cross-border settlements. The technology may also help Japan maintain competitiveness against other countries developing similar assets, including South Korea and Singapore.
While challenges remain particularly in maintaining liquidity, ensuring compliance, and mitigating cybersecurity risks, JPYC’s initiative underscores Japan’s determination to modernize its financial system.
The success of the yen-backed stablecoin could pave the way for broader digital transformation in Japan’s economy, offering a glimpse of how traditional currencies and blockchain innovation can coexist in a regulated financial landscape.
