Japan Launches First Legal Japanese Yen Stablecoin “JPYC”

Yen managed on Blockchain

JPYC went live today, October 27, 2025, following approval by the FSA under the Stablecoin Act 2023 – the first such license granted to a private issuer since the framework was created. Pegged 1:1 to the Japanese Yen and fully collateralized by Yen bank deposits and government bonds held at licensed institutions such as Mitsubishi UFJ Trust, the stablecoin ensures convertibility and transparency through monthly audits and on-chain attestation.

Built to scale on Ethereum's mainnet with Polygon Layer-2 with fees below 1 cent, JPYC targets daily utility remittances for Japan's 2 million foreign workers, encrypted e-commerce and payroll payments, reducing cross-border costs from 6.5% (SWIFT average) to less than 0.1%. Initial issuance is capped at 1 billion JPYC ($6.7 million), with JPYC Inc. expecting to reach 100 billion JPY ($670 million) in circulation by mid-2026, growing to 10 trillion JPY as adoption grows.

JPYC Inc. CEO Ryosuke Terashima highlighted the milestone: "JPYC connects Japan's conservative finance with global blockchain innovation, facilitating seamless yen flows without the need for dollar intermediaries." The token's ERC-20 standard ensures compatibility with DeFi protocols, although FSA regulations restrict high-risk integrations such as lending until further guidance. The launch fulfills the 2024 promise of FSA Commissioner Hideki Kuriyama, who said in March that "yen stablecoins are a national priority" amid G7 discussions on CBDC interoperability.

From 2018 ban to 2025 breakthrough

Japan’s path to JPYC reflects a decade of deliberate development. The 2018 Coincheck hack (the theft of $530 million in NEM) spurred the world’s first crypto licensing regime, limiting stablecoins to banks and trust companies until a 2023 law loosens regulations for private issuers with 100% yen reserves. Initial caution stemmed from the risk of yen volatility and AML concerns – Japan’s $1.2 trillion in annual foreign exchange inflows necessitated a peg.

The shift accelerated in 2024. The FSA’s stablecoin pilot program tested prototypes, attracting $200 million from pilot projects from MUFG and SBI, while a partnership between PayPay and Binance Japan (holding a 40% stake) matched 70 million users with crypto funds.

JPYC emerges as a winner: Unlike USDT’s $120 billion offshore empire, JPYC is domestically backed, in line with the BOJ’s yen-denominated digital CBDC experiments (Phase 2, Q2 2026). Globally, JPYC challenges . Asia’s $50 billion stablecoin market (heavy on USDT) is hungry for yen alternatives amid US sanctions and BRICS de-dollarization.

Evaluation and Conclusion

JPYC’s managed peg is groundbreaking: FSA’s comprehensive oversight—monthly reserve audits—builds trust, in contrast to USDT’s opaque fines ($41 million in 2021). Per Polygon, fees under 0.01 yen enable microtransactions, targeting Japan’s $1.5 trillion e-commerce industry (Rakuten, Amazon JP).

JPYC marks a major milestone: the convergence of tokenization, monetary policy, and blockchain in one of the world's largest economies. For the crypto market, JPYC demonstrates that stablecoins are no longer limited to dollar-centric segments, but are evolving into regulated multi-currency platforms of the digital economy.

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