Japan Launches JPYC, the First Legally Approved Yen Stablecoin to Strengthen Digital Payment Infr...

Japan launches JPYC, the first legally approved yen stablecoin backed by bank deposits and government bonds.

JPYC aims to achieve a 10 trillion yen circulation within three years, expanding blockchain use across major local businesses.

The launch marks Japan’s push to modernize payments and strengthen trust in regulated digital currency systems.

Japan’s fintech sector marked a key milestone as JPYC Inc. launched the country’s first legally recognized yen-denominated stablecoin on Monday. The token, known as JPYC, began trading through the firm’s new issuance and redemption platform, JPYC EX

JPYC Inc. became a registered fund transfer service provider with Japan’s Financial Services Agency in August, clearing the way for its operations.

Structure and Regulation

The JPYC stablecoin is pegged to the Japanese yen. It is based on various blockchains, such as Ethereum, Avalanche, and Polygon. The company holds 100% of issued tokens in yen deposits and Japanese government bonds. This approach follows strict requirements under Japan’s Payment Services Act. To purchase the token, users must verify their identity using Japan’s My Number card. The process ensures transparency and compliance with domestic financial laws.

Adoption and Business Integration

JPYC aims to achieve a circulation of 10 trillion yen, equivalent to approximately $ 65.4 billion, in three years. The company will increase its support of blockchain and establish partnerships with local companies. A number of Japanese companies have already stated that they will use the stablecoin

Densan System is a fintech company that is working on retail and e-commerce payment systems, including JPYC. Asteria plans to add JPYC functions to its enterprise data software used by more than 10,000 companies. Crypto wallet provider HashPort also intends to support JPYC transactions. These developments indicate a growing interest among domestic firms to test blockchain-based payments.

Policy Context and Market Impact

In June 2023, Japan changed its regulations concerning the stablecoins to create a regulated issuance environment. Under the new legislation, the issuers are to be registered under the Funds Settlement Act and Banking Act. Such measures will enhance consumer protection and limit risks associated with digital assets. In March, Japan revealed plans to reclassify crypto from “means of payment” to financial instruments under the FIEA Other banks, such as Sumitomo Mitsui, Mitsubishi UFJ, and Mizuho, are also looking into the stablecoin project. The relocation is in line with the long-term objective of Japan, which is to modernize its payment systems.

The rate of cashless payments has been growing steadily in Japan, with over 42.8% in 2024, compared to 13.2% in 2010. This is a tendency associated with shifting consumerism and the increase in trust in digital finance. Regulators are also assessing whether banks may hold digital assets like Bitcoin under new risk management frameworks.

As regional competitors expand their own stablecoin programs, Japan’s JPYC launch signals a regulated approach to blockchain-based finance. In August, Japan announced plans to approve its first yen stablecoin this fall with JPYC set to lead the rollout. The project combines domestic oversight with market-driven innovation, testing how digital yen transactions could fit into Japan’s evolving financial landscape.