Japan Breaks New Ground with Launch of First Yen-Denominated Stablecoin

Japan will debut the world’s first stablecoin pegged to the yen on Monday, a small but significant step in a market still dominated by cash and card payments.

The move aims to pull blockchain into everyday finance and test demand for a digital yen proxy.

JPYC, a Tokyo startup, said it will issue a fully convertible yen stablecoin backed by domestic bank deposits and Japanese government bonds (JGBs). The company plans to waive transaction fees at launch to spur usage, and instead earn income from interest on its JGB holdings.

The rollout comes as policymakers and investors revisit digital money’s role in mainstream finance. Support from the Trump administration in the US has revived interest in stablecoin use cases, while China is weighing approval for yuan-backed products, a sign of growing global momentum.

Dollar Tokens Still Dominate, But Japan’s Entry Could Mark A Turning Point For Regional Liquidity

Dollar-pegged tokens still dominate the market, accounting for more than 99% of circulating supply, according to international central bank data. A viable yen option could diversify liquidity in Asia and give local firms a way to settle faster and at lower cost than traditional rails.

Japan has been laying the groundwork. In 2023, authorities set rules to allow issuance of stablecoins under domestic oversight.

The country’s three megabanks, Mitsubishi UFJ Bank, Sumitomo Mitsui and Mizuho, are also preparing yen and dollar stablecoins, which could push digital assets into the mainstream for a population long accustomed to cash.