Japan positions yen stablecoin JPYSC at the center of Asia’s evolving crypto regulation

As Asia’s crypto rules rapidly mature, Japan is moving to anchor a yen stablecoin within its regulated financial system through a new trust bank-backed initiative.

Japan’s first trust bank-backed yen stablecoin JPYSC

SBI Holdings and Startale Group have officially unveiled JPYSC, a Japanese yen stablecoin that will be issued by SBI Shinsei Trust Bank, marking Japan’s first trust bank-backed stablecoin. The partners are targeting a Q2 2026 launch, although the timetable still depends on final regulatory approval from Japanese authorities.

Unlike JPYC, the existing Japanese yen stablecoin approved in October 2024 as a prepaid payment instrument, JPYSC falls into a different regulatory class. A trust bank issuer structure means direct yen reserves held under trust, tighter governance standards, and full compliance with Japan’s Payment Services Act. Moreover, this approach positions the token squarely within the traditional financial perimeter.

SBI VC Trade, the group’s licensed crypto exchange, will manage distribution and trading of the new asset. Meanwhile, Startale Group – the Web3 company behind the Astar Network and known for its ties to Sony – is leading the technical development of the protocol. That said, the success of the rollout will depend on both institutional adoption and regulatory follow-through.

Strategic vision behind JPYSC and the digital yen thesis

The project is not being framed as a simple payments tool. Instead, the partners describe it as core infrastructure for Japan’s future digital economy. In that context, the yen stablecoin is designed to function across multiple use cases, from settlement rails for institutions to programmable money for emerging Web3 applications.

Sota Watanabe, CEO of Startale Group, stated that “our yen-denominated stablecoin is not just a means of everyday payment – it will play a central role in a fully onchain world.” His comments suggest that JPYSC is intended as a base layer for broader onchain activity rather than a niche retail product. Moreover, the team appears focused on use cases far beyond e-commerce.

Watanabe added that the project team sees “enormous potential in enabling payments between AI agents and powering distributions for tokenized assets, both of which will soon become reality.” In practical terms, that implies a design geared toward machine-to-machine payments, automated smart contracts, and large-scale tokenization of real-world assets. However, these ambitions will require robust infrastructure and regulatory clarity.

The architecture is being built for interoperability across public blockchains and legacy financial infrastructure. JPYSC is therefore positioned as a bridge between conventional banking rails and Web3 ecosystems, with an emphasis on stablecoin interoperability with banks. This dual connectivity could prove critical for institutional adoption, cross-chain transfers, and integration with securities and payment systems.

Japan’s regulatory framework for stablecoins accelerates

Japan has been laying the regulatory groundwork for several years. In 2022, amendments to the Payment Services Act formally defined stablecoins as “Electronic Payment Instruments” and restricted issuance to licensed banks, trust companies, and registered fund transfer providers. As a result, JPYSC can only exist under the supervision of entities directly overseen by financial regulators.

The country’s three megabanks – MUFG, SMBC, and Mizuho – have already secured FSA approval for a joint stablecoin pilot. This pilot is testing how large financial institutions can issue and manage tokens fully backed by fiat reserves. Moreover, it signals that Japan’s banking sector views tokenized deposits and regulated stablecoins as a strategic priority rather than an experimental side project.

Regulation has continued to evolve. In March 2025, lawmakers passed a bill that allows trust stablecoin issuers to invest up to 50% of reserves in short-term government bonds. That change could improve yield profiles while maintaining low risk. At the same time, it underscores Japan’s move to integrate digital assets with sovereign debt markets, tightening the link between onchain liquidity and government securities.

Japan’s Finance Minister has labeled 2026 a “Digital Year,” underscoring a broader national digitalization agenda. In parallel, the FSA is preparing to reclassify crypto assets under the Financial Instruments and Exchange Act. However, the precise contours of that reclassification remain under discussion, and market participants are watching for details that will affect token issuers, exchanges, and custodians.

Asia’s stablecoin race and non-USD digital rails

The regional context is increasingly competitive. Japan is moving alongside other Asian financial centers that are racing to shape rules for stable-value tokens and to capture a share of new digital settlement flows. In this broader landscape, JPYSC is emerging as a key component of Japan’s response to asia stablecoin market growth.

Hong Kong has confirmed that it will issue its first batch of stablecoin issuer licenses in March 2026 under its new Stablecoins Ordinance. That framework aims to bring stablecoin activity inside a regulated perimeter while maintaining the city’s role as a regional financial hub. Moreover, it sets up a regulatory comparison point for Japan, as institutional investors weigh jurisdictions.

South Korea is also pushing adoption of won-denominated stablecoins, signaling a broader shift toward local currency tokens. With more Asian markets exploring sovereign-linked digital instruments, competition is emerging over standards, cross-border compatibility, and institutional use cases. That said, clear regulatory frameworks could make cooperation on interoperability easier over time.

Globally, over 90% of the $309 billion stablecoin market remains pegged to the U.S. dollar. Against that backdrop, JPYSC reflects a deliberate Japanese effort to build regulated non usd digital rails for institutional settlement and cross-border payments. The initiative is particularly geared toward serving corporates and financial institutions that want alternatives to dollar-centric infrastructure.

The sbi startale jpysc launch is timed for a regional inflection point, with Hong Kong’s licensing regime, South Korea’s experiments, and Japan’s own reforms converging around Q2 2026. If the rollout proceeds as planned, the new token could become a flagship trust bank backed stablecoin in Asia’s emerging multi-currency digital settlement network. However, real traction will depend on liquidity, integrations, and cross-border recognition.

Overall, Japan’s JPYSC initiative showcases how a regulated, bank-issued token tied to the yen can anchor new digital financial infrastructure, even as Asia’s stablecoin race intensifies and jurisdictions compete to define the next generation of programmable money.