1 on Ethereum, Avalanche, and Polygon

The Stablecoin yen giapponese debuts in a regulated form: JPYC has obtained the license of funds transfer service provider from the Japanese regulator Financial Services Agency (FSA), a key requirement for the issuance of a token with peg 1:1 to the yen on Ethereum, Avalanche, and Polygon. In this context, scenarios open up for digital payments, remittances, and Web3 integrations aligned with Japanese anti-money laundering regulations.

According to the data collected by our research team (monitoring updated to August 2025), JPYC has completed the regulatory procedures required by the FSA and has declared a policy of monthly attestations for reserves. Industry analysts note that the explicit requirement for segregation of reserves and periodic reporting should increase transparency compared to unregulated models.

What changes: regulated model and FSA supervision

JPYC now operates as a fund transfer service provider (Kawase) under the revised Payment Services Act as of June 2023, which outlined a specific framework for Electronic Payment Instruments (stablecoin) FSA. It should be noted that the new status entails requirements on minimum capital, KYC/AML procedures, reserve segregation, and periodic reporting under FSA supervision. For an overview of AML/CFT compliance best practices for digital assets, refer also to the international guidelines FATF.

Reserves and guarantees: yen in the bank and JGB with 1:1 coverage

The peg is supported by bank deposits in JPY and by Japanese Government Bonds (JGB) with short maturity, held to cover 100% of the tokens in circulation. For information on the liquidity and market characteristics of short-term JGB, see the official website of the Japanese central bank.

• Coverage: 1 JPYC = 1 yen, supported by immediately available liquidity (deposits) and liquid government securities.
• Transparency: independent attestations on reserves on a monthly basis, as indicated in the issuer’s preliminary white paper JPYC.
• Redemption: conversion to JPY in the account indicated by the user within 1 business day, within the limits set by the FSA license.

Transparency note: the initial amount, final frequency of audits, and name of the auditor are not yet public. An interesting aspect is that JPYC will have to disclose them to strengthen trust in the peg: the FSA requires periodic reporting and information on the custodian of the reserves.

The 3 networks at launch: standard, costs, and interoperability

The JPYC token is issued as ERC-20 on EVM-compatible networks.

• Ethereum: finality ~12 s; variable fees (0.5 – 5 USD average in L1).
• Avalanche C-Chain: finality ~2 s; fees on average less than 0.10 USD.
• Polygon PoS: high throughput; costs of a few cents.

Interoperability: an official mint/burn bridge is planned to move liquidity between chains; the contracts are under audit by a Big 4.

Issuance and redemption: how it works in practice

1. Onboarding: registration with KYC/AML for retail and corporate.
2. Deposit in JPY: bank transfer to JPYC account; mint 1:1 of the tokens.
3. Redemption: burn of tokens and credit in yen.
4. Controls: daily limits of 1 million JPY for individuals, 10 million JPY for companies.

Immediate use cases: payments, remittances, Web3

• Digital payments in yen: on-chain settlement with rapid finality.
• Rimesse: transfers 24/7 with local conversion in JPY.
• Corporate treasury: management of liquidity in tokenized yen.
• Decentralized finance: liquidity pools and lending markets in JPY.
• E-commerce: prices in yen for Web3 merchant.

Potential Impact on JGB and Markets

A broad adoption of the token could fuel new structural demand for JGB short-term, similar to the USD T-Bills model observed with USDT/USDC. Currently, in the absence of data on the amount issued, the effect remains primarily qualitative; market dynamics will be closely related to the amount of declared reserves and the frequency of published attestations.

The critical points: what to watch in the coming months

• Stability of the peg in stress scenarios.
• Bank concentration of reserves.
• Privacy vs compliance for retail users.
• Cross-border rules and travel rule.
• Smart contract security and incident response plans.

Brief comparison with USD stablecoins

• Reserve asset: JPY & JGB vs T-Bills.
• Market: initial focus domestic; global liquidity to be built.
• Conversion costs: potentially lower spreads on JPY-native pairs.

Essential FAQ

When does the launch start?

FSA license obtained on August 16, 2025; distribution on three networks expected by the fall. We will monitor the first monthly attestations of reserves that should appear within the first weeks from issuance.

How are reserves verified?

Monthly attestations by a third-party auditor (name pending publication) and segregated balance sheet. The FSA requires periodic reporting and the publication of custody mechanisms to mitigate concentration risks.

On which standards does the token operate?

ERC-20 on Ethereum, Avalanche (C-Chain), and Polygon PoS.

How much does it cost to use it?

Variable fees: Ethereum L1 0.5–5 USD; Avalanche ~0.1 USD; Polygon <0.05 USD per transaction.

Timelines and next steps

• August 2025: FSA license granted; audit of contracts in progress.
• Autumn 2025: initial issuance, activation of multi-chain bridge, first reserve attestations.
• Ongoing: integrations with PSP, merchants, and DeFi protocols.

Sources, documents, and transparency