Japan launches first yen-pegged stablecoin

Issued on a scale of about 94 trillion won

The first yen-pegged stablecoin was launched in Japan on the 27th (local time).

According to Reuters, Japanese startup JPYC began issuing a stablecoin called JPYC from that day. JPYC is fully convertible into yen and is backed by domestic savings and Japanese government bonds (JGB).

The company aims to issue JPYC worth 10 trillion yen (about 94 trillion won) over three years and to promote the widespread overseas use of digital assets. To encourage JPYC use, it plans initially not to charge transaction fees and instead aims to generate revenue from interest on holdings of Japanese government bonds.

The company's CEO, Okabe Noritaka, said, "We want to promote innovation by enabling startups to take advantage of low transaction and payment fees."

Blockchain-based stablecoins are generally pegged to fiat currencies and offer faster and cheaper transactions.

According to the Bank for International Settlements (BIS), dollar-linked stablecoins have surged with strong support from U.S. President Trump. Dollar-linked stablecoins account for more than 99% of global stablecoin supply.

According to Nikkei, Japan's three major banks plan to jointly issue a stablecoin.

Tomoyuki Shimoda, a former Bank of Japan executive and currently a professor at Rikkyo University in Japan, said, "It is uncertain whether yen stablecoins will spread widely in Japan." He said, "Yen stablecoins will not have the same momentum as dollar-based stablecoins."

He said, "If mega-banks enter the market, the pace could be somewhat faster, but it will take at least two to three years for yen stablecoins to become widespread."

Policymakers see that stablecoins could facilitate the movement of funds outside regulated banking systems and weaken banks' roles in global payment flows.

Bank of Japan Deputy Governor Ryozo Himino said in a speech last week, "Stablecoins are emerging as key players in the global payment system and could partially replace the role of bank deposits," urging global regulators to adapt.

In Asia, South Korean companies are also introducing won-based stablecoins, and China is considering allowing the use of yuan-based stablecoins.

Contributing reporter Jeong-ah Kim kja@hankyung.com