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Japan, a country that has long been known for its cash and credit card supremacy, has made a big step toward changing its financial system to digital with the launch of JPYC, the world’s first fully regulated yen-pegged stablecoin.
JPYC Co., Ltd., a Tokyo-based fintech company, launched this milestone issuance on October 27, 2025. It is backed 1:1 by yen deposits and Japanese government bonds (JGBs). This is a big step forward for the country’s blockchain goals, as it will make cross-border payments and DeFi integrations faster and cheaper in a market that is ready for change.
JPYC wants to have 10 trillion yen ($65.4 billion) in circulation within three years. This makes it a worldwide player in the $300 billion stablecoin market, which is mostly made up of USD-pegged coins like USDT. It is the first yen-backed token that is truly global. It competes with the dollar’s stranglehold and follows Japan’s Payment Services Act.
It also lets users make transactions without paying fees and redeem their tokens on the new JPYC EX platform. Stablecoins transacted $46 trillion in 2025 volumes. JPYC’s arrival could change Asia’s digital economy, but there are still problems with getting people to use it in a cash-loving country.
A Safe Way to Get Digital Yen
The launch on October 27, which was celebrated at a press conference in Tokyo, debuts JPYC as Japan’s first fiat-referenced stablecoin. It is completely compliant with the 2023 changes to the Funds Settlement Act and the Banking Act. JPYC Inc. is a licensed funds transfer provider by the Financial Services Agency (FSA) since August 2025.
The token is always worth 1 yen because it is backed by reserves in bank deposits and JGBs. This keeps the value stable and allows anyone to redeem it.
Users can access it through the JPYC EX portal, where they can make purchases and withdrawals right away using their My Number national ID. This connects traditional finance with the speed of blockchain.
JPYC works on a number of chains, including Ethereum, Polygon, and Avalanche, to make sure that everything works together.
It can handle everything from retail payments to institutional DeFi. “This is a major milestone in the history of Japanese currency,” said CEO Noritaka Okabe, who pointed out seven early corporate partners, such as Densan System for e-commerce solutions.
There are no transaction costs at first, and the company makes money via JGB yields (3%+ long-end rates), which makes it appealing to businesses looking for cheap ways to settle.
As Reuters said, the debut happened at the same time as the release of new 10,000-yen notes. This shows that Japan is embracing both analog and digital evolution.
How to Build Trust with Full Reserves
JPYC’s architecture puts openness and robustness first. It requires 100% backed by yen reserves and JGBs, which are reviewed every three months by the FSA to avoid the depegging concerns that TerraUSD’s 2022 collapse showed.
The token’s ERC-20 standard on Ethereum makes it work with DeFi protocols, and Polygon and Avalanche offer fast, low-cost transactions. This is great for remittances, as Japan sends $70 billion a year to Asia and could cut SWIFT fees by 90%.
The JPYC EX platform makes it easier to issue and redeem: Users send yen through a bank transfer, get tokens in compliant wallets, and can withdraw 1:1 at any time. My Number KYC makes sure that AML rules are followed. Okabe’s goal is to issue 10 trillion yen in three years and make it a worldwide digital yen for startups and cross-border trade. Interest on JGBs (which is 3% because of BOJ rate hikes) pays for operations without charging users, which helps the business develop naturally.
This is different from how USD stablecoins spread over the world: USDT has a supply of $183 billion across more than 100 chains, while JPYC focuses on yen and targets Asia’s $150 billion remittance flows. It might capture 5–10% of these flows through connections with LINE Pay or Rakuten. CoinDesk said that “JPYC is Asia’s only truly global fiat-pegged token,” and it uses Japan’s $5 trillion in foreign exchange reserves to back up its claims.
Effects on Japan’s Financial System
Japan’s reliance on cash—60% of transactions, according to the BOJ—has made digital payments harder, but JPYC comes at a time when regulations are loosening: The 2023 acts give banks and fintechs the right to create stablecoins. In 2025, FSA approvals will go up by 200%.
In April, Sumitomo Mitsui Banking Corporation (SMBC) worked with Ava Labs to make a yen-pegged token on Avalanche. Mitsubishi UFJ is also looking into RWA tokenization for bonds. “Stablecoins will be very important for international payments and will partially replace bank deposits,” said BOJ Deputy Governor Ryozo Himino in a recent interview with Reuters. He also called for global standards to match the yen’s reserve status.
The ripple in the ecosystem: JPYC might cut expenses for Japan’s $1.5 trillion export machine, making it possible for supply chains to make programmable payments (like Toyota’s just-in-time sourcing). It opens up yen liquidity on Uniswap or Aave for DeFi, connecting TradFi while staying under the FSA’s 20% non-yen exposure cap.
Adoption is slow—yen stablecoins only make up 0.3% of the worldwide market, whereas USD stablecoins make up 99.7%—but Okabe thinks it will take 2–3 years to mature, faster because megabanks are getting involved. Problems: The APPI law in Japan raises privacy issues, and the BOJ’s 0.25% rate is unstable compared to the U.S. 4.25% rate.
In East Asia, South Korea allows stablecoins pegged to the won, while China’s e-CNY connects the world in a test program. But JPYC’s worldwide peg makes it a neutral bridge.
Conclusion
JPYC’s introduction on October 27, 2025, is the first stablecoin backed by deposits and JGBs. It brings Japan into the $300 billion global market and aims to cut remittance and DeFi fees while increasing the circulation of 10 trillion yen.
With FSA licensing and networks like Ethereum and Polygon, it’s Asia’s global yen token, which is a threat to the USD’s dominance as the BOJ pushes for digital currency.
Links to SMBC and Mitsubishi point to a corporate takeover, but the cash culture and privacy issues will take time to work out—Okabe’s 2–3 year time frame seems appropriate. JPYC is the digital ambassador for yen in the $46T stablecoin economy: Clear, effective, and ready to be sent abroad. Keep an eye on integrations; they could change the game for Tokyo’s financial throne.
