Japan to roll out first yen-pegged stablecoin: report

Japan is reportedly gearing up to launch its first official stablecoin, as interest for the asset class deepens across Asia.

According to a recent report by local outlet Nikkei Asia, Japan’s Financial Services Agency (FSA) is preparing to approve the issuance of a yen-denominated stablecoin in the coming months. The expected rollout will mark the first-of-its-kind move by the country, and the first official digital currency tied directly to the local fiat.

Tokyo-based fintech firm JPYC will lead the initiative, and will register with regulatory authorities as a licensed money transfer business before launching the token. Once approved, the stablecoin, which will also be named JPYC, will be issued, backed by liquid assets such as bank deposits and Japanese government bonds.

Interested individuals and institutions will be able to apply to purchase the stablecoins using the yen, and receive the assets using digital wallets. The report added that use cases will include international remittances, as well corporate payments and settlements.

The stablecoin is also expected to play a role in decentralized finance (DeFi) applications, where blockchain-based products could integrate the yen-backed asset for lending, trading, and asset management services.

Japan’s stablecoin push follows regulatory adjustments by the FSA earlier this year, after criticism from local industry members over its strict approach to the sector. The revisions classified stablecoins as “currency-denominated assets,” allowing them to be issued by regulated entities.

However, JYPC CEO Norikata Okabe has consistently reiterated that the incoming project cannot be classified as a cryptocurrency.  

Still, the timing of the efforts suggests Japan is aiming to keep pace with the stablecoin momentum building across Asia.

Stablecoins gain traction in Asia

In recent months, several Asian regions, including Hong Kong, South Korea, and China, have been working on their various stablecoin initiatives. Hong Kong has taken the lead, introducing an official framework to guide issuance. Authorities have also signaled readiness to accept applications from potential issuers, though the approval process will be strictly vetted.

In South Korea, local digital infrastructure firm Intech recently unveiled South Korea’s first won-pegged stablecoin. In South Korea, local digital infrastructure firm Intech recently unveiled the country’s first won-pegged stablecoin. The token, backed 1:1 by the Korean won, was introduced on August 5 in a controlled pilot phase, following reports of major institutions showing interest in the sector.

China, despite still maintaining a cautious stance, is not left out. Insider talks for a potential stablecoin launch are growing, with officials reportedly seeking expert input on how best to issue and implement stablecoins pegged to the yuan.

Much of this growing interest follows the recent passage of landmark U.S. GENIUS legislation on stablecoins, which strengthened the asset class’ global appeal. Countries across Asia are now moving to secure a position in the sector and reduce reliance on dollar-pegged assets.

The total stablecoin market capitalization currently stands at $259.81 billion, dominated by the two leading U.S. dollar-pegged assets, Tether’s USDT (USDT) and Circle’s USD Coin (USDC).