Stablecoin launches and adoption have been increasing over the past year, and Japan is adding waves to this momentum. The country has reportedly launched its first yen-pegged stablecoin — JPYC — today, following approval from Japan’s Financial Services Agency. The stablecoin is named after the Tokyo-based fintech firm JPYC, which introduced it as a digital currency pegged 1:1 to the Japanese yen.
JPYC stablecoin
According to a news agency, JPUC stablecoin is also backed by domestic savings and Japanese government bonds (JGB). In simple words, for every yen-pegged stablecoin issued, the fintech firm will hold assets in Japan of equal value. Here, domestic savings mean cash held in Japanese banks.
Why does JPYC stablecoin matter?
To date, most stablecoins launched thus far have been backed by the US dollar, including Tether (USDT) and Circle (USDC). According to the Bank for International Settlements, nearly 99% of stablecoins are backed by the US dollar. The launch of JPYC pegged to the yen implies the country’s intention to bolster its digital financial sovereignty and reduce its dependence on dollar-denominated assets.
Japan’s yen-backed stablecoin would also encourage domestic use of digital currencies for DeFi applications, e-commerce, remittances, and other use cases. The stablecoin will also serve as an easier and faster means for businesses to send and receive money in yen.
Japan’s regulatory reforms
Besides the support from Japan’s Financial Service Authority, comes the Payment Service Act that legally defines stablecoins for trust companies, licensed banks, and registered money transfer agents to issue them. This regulation has played a significant role in the launch of JPYC stablecoin.
Worth noting, Japan’s prominent financial firms — Sumitomo Mitsui Financial Group (SMFG), Mitsubishi UFJ Financial Group (MUFG), and Mizuho Financial Group have recently united to unfold their own yen-pegged stablecoin aimed at simplifying corporate payments and settlement systems.
