Japan’s FSA is set to approve JPYC as the first yen-backed stablecoin this fall, a move that could reshape demand for Japanese government bonds.
Author: Akshat Thakur
August 17, 2025 — Japan’s Financial Services Agency (FSA) is preparing to give the green light to yen-backed stablecoins, with fintech firm JPYC expected to launch the country’s first domestic fiat-pegged digital asset this fall.
Tokyo-based JPYC is registering as a money transfer business this month, paving the way for issuance. Each JPYC token will be pegged 1:1 with the yen and backed by liquid reserves such as deposits and JGBs. Purchases will be made through bank transfers, with tokens delivered directly to digital wallets.
The global stablecoin sector has surged past $286 billion, led by USDT and USDC. While dollar-pegged tokens already circulate in Japan, this marks the first domestically issued yen stablecoin. Policymakers believe it could diversify liquidity options and strengthen Japan’s role in digital finance.
Okabe, a representative of the JPYC issuer, noted that stablecoins in the US hold significant amounts of Treasurys. If replicated in Japan, JPYC adoption could increase demand for JGBs. He warned that countries without stablecoin frameworks risk higher bond yields as they miss out on this new institutional demand.
Circle secured approval in March 2025 to list USDC on SBI VC Trade, marking the first time a foreign-issued stablecoin received FSA clearance. Circle plans to expand to Japan, bitbank, and bitFlyer, aiming to strengthen its foothold in one of Asia’s most regulated crypto markets.
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