Key Takeaways
- Once operational, tokens will be issued at a fixed rate of one yen per unit and supported by liquid holdings, including commercial bank deposits and Japanese government bonds.
- JPYC is set to lead the issuance and complete registration as a money transfer business within weeks, as per reports
Japan might welcome yen-backed stablecoins soon. Speculation is rife after reports suggest that the country’s Financial Services Agency (FSA) is gearing up to approve the issuance of yen-denominated stablecoins.
As per local media reports, fintech giant JPYC is set to lead the issuance. The Tokyo-based company will complete registration as a money transfer business within weeks, a step required before distributing its digital yen.
Once operational, tokens will be issued at a fixed rate of one yen per unit and supported by liquid holdings, including commercial bank deposits and Japanese government bonds. Individuals and corporations will be able to acquire JPYC through bank transfers, which are then settled into digital wallets.
The development assumes significance as it will mark the first time Japan will allow a domestic fiat-pegged digital currency.
Taking to X, Okabe, a representative of the JPYC issuing company, underlined that monetary policy considerations are driving governments across the world, including Japan’s, to accelerate stablecoin frameworks.
On stablecoin’s impact on the country’s bond market, he said that a similar trend like that of the United States, where stablecoin issuers have become major buyers of US Treasurys, could also emerge in Japan following JPYC’s widespread adoption. “JPYC will likely start buying up Japanese government bonds in large quantities going forward,” he wrote on X.
Okabe further warned that governments failing to advance stablecoin frameworks may face disadvantages, including higher interest costs on public debt, by missing out on this new pool of demand.
The move comes against the backdrop of the global stablecoin market booming and expanding to more than $286 billion. Earlier this year, in March, stablecoin giant Circle officially launched USDC in Japan, after it received regulatory approval for its listing on SBI VC Trade. More countries are also warming up to the idea of stablecoins.
Earlier this year, USDC and Circle’s euro-backed EURC stablecoin were recognized as the first stablecoins under the Dubai Financial Services Authority’s new regime.
