Japan’s FSA has approved first Yen stablecoin

The National Stablecoin Race

Japan has long been a leader in crypto legislation. It has called fiat-backed stablecoins “Electronic Payment Instruments” since the 2022 amendment to the Payment Services Act. Only licensed banks, trust companies, and registered money transfer service providers are allowed to issue them. By 2023, stablecoins will officially be called “currency-denominated assets.” This will make it easier for new ideas to emerge while ensuring safety and transparency.

JPYC Inc. issues JPYC, a 1:1 yen-backed stablecoin. The coin is backed by highly liquid assets such as bank deposits and Japanese government bonds (JGBs). Since 2020, the company has been working with the Financial Services Agency (FSA). In 2021, the company released a prepaid version of the stablecoin, and in 2022, the company officially registered. JPYC aims to issue 1 trillion yen (about $6.78 billion) in three years. This is to meet the growing demand for fast and easy digital payment options, especially as the global stablecoin market is now worth over $286 billion, with dollar-pegged stablecoins such as USDT and USDC making up the majority.

As Japan pushes digital financial reforms, such as plans for a Bitcoin ETF and changes to cryptocurrency taxation, the country is also trying to attract institutional investment by competing with other countries’ markets. In March 2025, SBI VC Trade approved Circle, the issuer of USDC, to list on its platform. This opened the door for foreign stablecoins in Japan. However, JPYC is the first domestic option, reducing dependence on cryptocurrencies pegged to the US dollar.

Promoting international investment and strategy

JPYC is designed to maintain a stable exchange rate of 1 JPYC = 1 Yen, backed by cash assets such as bank deposits and Japanese government bonds. Citizens and businesses can purchase tokens via bank transfers and tokens will be transferred directly to digital wallets. JPYC requires a reserve of at least 101% of its weekly issuance value, and deposits must be made within three business days to maintain stability and liquidity.

JPYC operates on public blockchains like Ethereum, Polygon, and Shiden, making it more open and interoperable with the rest of the crypto ecosystem. This is different from some stablecoins that use private blockchains. This makes it easy to use JPYC in DeFi applications, cross-border payments, and asset management.

JPYC is not only used for cryptocurrency trading; it can also be used in the real world for activities such as sending money internationally, making payments to businesses, and managing assets. This stablecoin can reduce foreign exchange costs in cross-border trade and support e-commerce platforms or digital securities. It can also be integrated with future central bank digital currencies (CBDCs).

Circle Ventures (the issuer of USDC) and Japanese companies Asteria, Persol, Densan System, and Aiful have all invested in JPYC in a 500 million yen Series A round. Simplex, a leading fintech company, developed the JPYC trading system, making it more reliable and scalable.

Evaluation and Conclusion

Japan’s approval of its first yen stablecoin, JPYC, in the fall of 2025 is a strategic step that marks the intersection of blockchain technology and the traditional financial system. Backed by highly liquid assets, a robust regulatory framework, and investment from big names like Circle, JPYC not only promises to revolutionize digital payments and DeFi in Japan, but also has the potential to reshape the government bond market.

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