Japan’s Financial Services Agency (FSA) is set to approve the issuance of yen-denominated stablecoins as early as this fall, a historic move that marks the country’s first introduction of a domestic fiat-pegged digital currency. This development underscores Japan’s commitment to fostering innovation in its financial sector while maintaining stringent regulatory oversight.
According to The Nihon Keizai Shimbun, Tokyo-based fintech firm JPYC is poised to spearhead this innovation. The company plans to register as a money transfer business within the month, paving the way for the rollout of yen-pegged stablecoins. JPYC aims to maintain a fixed value of 1 JPY = 1 yen, supported by highly liquid assets, including bank deposits and Japanese government bonds. The process will involve issuing tokens to digital wallets via bank transfer after purchase applications from individuals or corporations.
This move comes at a time when the global stablecoin market, predominated by dollar-pegged assets such as USDt (USDT) and Circle’s USDC (USDC), has swelled to over $286 billion. Although US dollar stablecoins have already established a presence in Japan, this initiative represents the nation’s first foray into a yen-based stablecoin offering.
Yen Stablecoins Could Reshape Japan’s Bond Market
In a recent post on X, Okabe, a representative from the JPYC issuing company, emphasized the potential impact of yen stablecoins on Japan’s bond market. He highlighted how major US stablecoin issuers have become significant buyers of US Treasurys, using these assets as collateral for their circulating tokens.
Okabe suggested that a similar trajectory in Japan could elevate the demand for Japanese government bonds (JGBs) if JPYC sees widespread acceptance. “JPYC will likely start buying up Japanese government bonds in large quantities going forward,” he noted, pointing out the growing intersection between monetary policy and stablecoin frameworks.
He further cautioned that countries trailing in stablecoin development might face higher government bond interest rates due to missing out on this new class of institutional demand. This dynamic is reportedly prompting governments, including Japan, to expedite the establishment of stablecoin regulatory frameworks.
Circle Launches USDC in Japan
In related developments, Circle officially introduced USDC in Japan on March 26, following regulatory approval for its listing on SBI VC Trade. This crypto exchange operates under a joint venture between SBI Holdings and Circle Japan KK. The FSA granted approval on March 4, marking the first instance of a foreign-issued stablecoin receiving clearance under Japan’s regulatory framework.
At the time, Circle announced plans to expand USDC listings to Binance Japan, bitbank, and bitFlyer. Two of these platforms are among Japan’s largest exchanges, each managing over $25 million in daily trading volume and attracting more than 1.85 million monthly visits.
For more information, visit the source: https://cointelegraph.com/news/japan-approves-first-yen-stablecoin-jpyc?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound
