Yen stablecoin JPYC hits 4x its peg on Upbit debut, then crashes back to 1 yen overnight

Yen stablecoin JPYC traded at more than four times its 1-yen peg on South Korea’s Upbit on September 17, peaking at 37.60 won (about 4.14 yen) before crashing back to roughly 1.02 yen overnight.

The first yen-pegged listing on a Korean exchange drew over 30 billion yen in first-day turnover and forced issuer JPYC Inc. to briefly halt minting on Ethereum and Polygon.

Arbitrage drives Yen stablecoin activity across markets

JPYC Inc. operates JPYC EX, where verified users can mint and redeem JPYC for 1 yen per token. The token is backed by assets including yen deposits and Japanese government bonds.

As the Yen stablecoin climbed on Upbit, traders moved to exploit the gap between its exchange price and its 1-yen redemption value. Korean buyers sought cheaper JPYC through decentralized markets, while Japanese holders could mint tokens at par and potentially sell them at a premium.

On Uniswap, the Ethereum-based JPYC pair reached approximately 3.11 yen at around 19:30 JST. The Polygon pair reached about 2.71 yen during the same period. A thinly traded Polygon market recorded a 15-minute high of roughly 6.07 yen at 19:15.

The unusual price differences coincided with a substantial expansion in the token’s circulating supply. On-chain data showed approximately 4.26 billion JPYC in circulation by 09:00 JST on September 18, around 2.2 times the previous day’s level.

The Yen stablecoin also expanded its exchange accessibility during the episode. Ethereum deposits were available when trading began, while Polygon and Kaia deposit support became available at 18:44 on September 17.

Yen stablecoin issuer temporarily halts issuance

The rapid increase in activity put pressure on JPYC Inc.’s issuance system. The company suspended issuance reservations on Ethereum at 20:34 JST on September 17 and subsequently halted Polygon issuance at 22:19.

Both networks were later restored. Ethereum issuance resumed at 23:43, while Polygon issuance was restored by 00:22 on September 18.

The company was still investigating the cause of the interruptions and had not confirmed that they were directly connected to the Yen stablecoin’s supply expansion or its sharp price movements.

Upbit also issued a trading notice warning users about restrictions affecting Korean customers seeking direct redemption through JPYC EX. The exchange noted that a stablecoin’s market price can diverge from the value of the asset it tracks.

JPYC CEO Noritaka Okabe separately addressed the unusual price action on X, arguing that a listing itself does not create value. He suggested, while presenting the explanation as speculation, that automated trading bots or traders seeking early liquidity may have contributed to the initial price surge.

By 02:25 JST on September 18, JPYC had fallen back to approximately 1.02 yen on aggregate market trackers.

Yen stablecoin demand exposes market and regulatory gaps

Okabe provided additional details about the episode on September 18, saying issuance demand had become intense enough for JPYC Inc. to run short of inventory overnight. He also said a surge in account applications required employees to work irregular late shifts.

According to Okabe, he was unaware that the Upbit listing was about to take place. First-day trading turnover exceeded 30 billion yen, substantially above his expectations.

“First-day turnover exceeded 30 billion yen,” — Noritaka Okabe, JPYC CEO.

Okabe also pointed to differences between Japan’s domestic regulatory framework and overseas exchange activity. He noted that overseas exchanges are not subject to Japan’s 1 million-yen cap on issuance and redemption, which he argued could provide JPYC with a faster route into international markets.

At the time of the episode, no domestically licensed electronic payment instruments dealer had begun trading JPYC. SBI VC Trade received the first relevant registration in March 2025, while Coincheck completed the second in August 2026.

The episode ultimately demonstrated how quickly a Yen stablecoin can diverge from its intended value when liquidity is fragmented between centralized exchanges, decentralized markets and an issuer’s redemption system.

The subsequent return toward parity also illustrated the role of arbitrage. When traders can acquire tokens below their redemption value and redeem or sell them at a higher price, those transactions can help narrow price differences across markets.

For JPYC, however, the episode left traders who purchased near the peak facing losses as the price moved back toward its 1-yen reference value. It also underscored the importance of access to issuance, redemption and cross-chain liquidity when a Yen stablecoin enters a new market.

As JPYC expands across exchanges and blockchain networks, the Upbit debut provides a notable example of how market structure, liquidity and jurisdictional differences can temporarily disrupt the pricing of a stablecoin designed to track the Japanese yen.