Japan is set to approve its first yen-backed stablecoin JPYC via the country’s Financial Services Agency (FSA) in the fall.
This will be the first time Japan is exploring a digital currency tied directly to the yen. Hence, this is likely to change how the nation’s financial markets operate.
According to Japanese publication The Nihon Keizai Shimbun, the JPYC is developed by a Tokyo based fintech company. The company will register as a money transfer business in August 2025.
What should you know about the first yen-backed stablecoin?
Stablecoins are digital currencies designed to keep a steady value by being tied to assets like cash or bonds.
The yen-backed stablecoin will maintain a fixed value, with one JPYC equaling one yen.
It will be backed by safe assets like bank deposits and Japanese government bonds (JGBs).
People and companies will be able to buy JPYC through bank transfers, and the tokens will be sent to their digital wallets. It remains to see whether they would be custodial wallet or non custodial wallets.
The global stablecoin market, led by U.S. dollar-based coins like USDT and USDC, is valued at over $286 billion.
While U.S. stablecoins are already popular in Japan, JPYC will be the first to use the yen.
How will the JPYC impact Japan’s bond market?
The launch of JPYC could significantly affect Japan’s bond market.
Okabe, a representative from JPYC’s issuing company, says that U.S. stablecoin issuers buy large amounts of U.S. Treasury bonds to support their tokens.
He predicts JPYC could do the same with Japanese government bonds, increasing their demand if the stablecoin becomes widely used.
Okabe also noted that countries slow to adopt stablecoins might see higher bond interest rates as they miss out on new demand from big investors. Japan’s approval of yen-backed stablecoins exhibits the country’s commitment to keeping up with the global rise of digital currencies.
