Japan’s JPYC Emerges as a Contender Against the Dollar in the Stablecoin Market

JPYC, a stablecoin backed by the Japanese yen, has become the first of its kind in Japan, representing a major milestone in the country's stablecoin sector. The token, introduced by fintech company JPYC Inc. on October 27, is pegged 1:1 to the yen and is fully collateralized with yen deposits and government bonds. It adheres to the strict requirements of Japan’s Payment Services Act, according to

. The stablecoin is available on several blockchains, such as , , and Polygon, with future expansion planned, as reported by .

JPYC Inc., which registered as a fund transfer service provider with Japan’s Financial Services Agency in August, launched JPYC EX, a platform dedicated to issuing and redeeming the token. To use the service, participants must verify their identity using Japan’s My Number card, ensuring adherence to anti-money laundering laws, TradingView noted. The company has set a goal to reach 10 trillion yen (about $65.4 billion) in circulation within three years, a figure that is still a small portion of the $183.2 billion market capitalization of leading stablecoin

, according to The Block.

The debut of JPYC has attracted attention from Japanese companies interested in adopting the stablecoin for their business operations. Densan System, a fintech company, is building payment solutions for retail and e-commerce using JPYC, while Asteria, an enterprise software provider, plans to integrate the token into products used by more than 10,000 businesses. Crypto wallet firm HashPort has also announced support for JPYC transactions, TradingView reported.

Japan’s regulatory framework has played a crucial role in the development of stablecoins. Since June 2023, the country has required stablecoin issuers to register under the Funds Settlement Act and Banking Act, a move that has encouraged innovation while maintaining oversight. Other financial institutions, such as Sumitomo Mitsui Banking Corp. (SMBC), are also exploring stablecoin projects, often collaborating with blockchain companies like Ava Labs, according to TradingView.

The introduction of JPYC comes amid a global surge in stablecoin usage. The market, largely led by U.S. dollar-linked tokens like USDT and

, now exceeds $308 billion in total value. In Japan, where dollar-based stablecoins such as Circle’s USDC are already present, JPYC seeks to establish itself by offering localized payment options with reduced cross-border transaction barriers, as reported by .

To encourage adoption, JPYC is initially waiving transaction fees, instead earning revenue from interest on government bonds. Experts like Tomoyuki Shimoda from Rikkyo University believe that widespread use could take two to three years, reflecting Japan’s measured approach, according to

. At the same time, rivals such as Monex Group and a consortium of major banks—including MUFG and Mizuho—are preparing to launch their own yen-backed stablecoins, suggesting the market could soon expand, Cointelegraph noted.

As Japan continues to tighten its regulations, including possible new rules that would let banks hold cryptocurrencies as investments, the environment is becoming increasingly competitive for stablecoins. JPYC’s launch highlights the growing importance of digital assets in transforming payment systems both in Japan and worldwide.