Japan Launches World’s First Yen-Backed Stablecoin JPYC

TLDR

• Japanese startup JPYC launched the world’s first yen-pegged stablecoin on October 27, 2025, fully backed by domestic savings and Japanese government bonds
• Japan’s three largest banks will launch their own joint yen stablecoin system on October 31 through MUFG’s Progmat platform for corporate settlements
• The stablecoin will initially charge no transaction fees and will earn revenue from interest on JGB holdings instead
• Dollar-based stablecoins currently account for 99% of the $286 billion global stablecoin market
• Bank of Japan Deputy Governor Ryozo Himino stated stablecoins could partially replace traditional bank deposits in the global payment system

A Japanese startup called JPYC launched the world’s first stablecoin pegged to the yen on Monday, October 27, 2025. The digital currency is fully convertible to yen and backed by domestic savings and Japanese government bonds.

The launch received approval from Japan’s Financial Services Agency. This marks the first major economy to support a non-dollar stablecoin with regulatory backing.

JPYC will not charge transaction fees initially. The company plans to earn revenue from interest on its holdings of Japanese government bonds instead.

The move comes as global interest in blockchain-based finance grows. President Donald Trump has expressed support for the stablecoin sector in the United States.

China is also considering allowing yuan-backed stablecoins. These developments show growing momentum worldwide for digital currencies pegged to traditional fiat money.

Major Banks Enter the Market

Japan’s three largest banks will join the stablecoin market soon. Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho plan to launch a joint yen-stablecoin system on October 31.

The banks will use MUFG’s Progmat platform for corporate settlements. The system could connect more than 600,000 NetStars payment terminals by mid-November.

This institutional participation could push stablecoins into mainstream use in Japan. The country has traditionally favored cash and credit card payments.

Japan’s digital payment adoption has grown over time. Cashless payments rose from 13.2% in 2010 to 42.8% in 2024, according to government data.

Market Context and Regulatory Framework

The global stablecoin market is currently worth over $286 billion. Dollar-backed stablecoins dominate, accounting for 99% of the total supply.

Japan established rules for stablecoin issuance in 2023. South Korea has also pledged to allow companies to introduce won-based stablecoins.

Policymakers have raised concerns about the technology. They worry stablecoins could move funds outside regulated banking systems.

Bank of Japan Deputy Governor Ryozo Himino addressed these concerns in a recent speech. He said stablecoins “might emerge as a key player in the global payment system.”

Adoption Timeline

Experts predict gradual adoption of yen-pegged stablecoins. Tomoyuki Shimoda, a former Bank of Japan executive, said it would take time for yen stablecoins to spread.

Shimoda noted the difference from dollar-backed versions. The U.S. dollar serves as the world’s reserve currency and is used globally.

He stated it could take at least two to three years for widespread adoption. The entry of megabanks could accelerate this pace.

Japan’s three largest banks plan to launch their joint yen stablecoin system on October 31 for corporate settlements through MUFG’s Progmat platform.

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