Japan to Approve First Yen-Backed Stablecoins This Fall
Japan’s Financial Services Agency (FSA) is preparing to approve the country’s first yen-denominated stablecoin as early as this fall, a move that could transform the domestic financial landscape and reshape demand for Japanese government bonds (JGBs).
JPYC to Lead Stablecoin Rollout
Tokyo-based fintech JPYC is set to register as a money transfer business this month, according to The Nihon Keizai Shimbun. Once approved, JPYC will issue a yen-pegged stablecoin designed to maintain a 1:1 parity with the Japanese yen, backed by liquid assets including bank deposits and government bonds.
Users—both individuals and corporations—will be able to purchase JPYC tokens via bank transfers, which are then deposited into digital wallets. This marks the first domestic offering of a yen-backed stablecoin, even though U.S. dollar stablecoins like USDT and USDC already have a foothold in Japan.
Potential Impact on Japan’s Bond Market
JPYC’s issuer representative Okabe suggested on X that yen stablecoins could replicate the U.S. trend, where stablecoin providers became major buyers of U.S. Treasurys. If JPYC gains widespread adoption, demand for JGBs could rise significantly.
ステーブルコインは巨大な国債消化装置であり、
ステーブルコイン発行体のTetherやCircleは米国債の主要な買い手になっています。日本でもこれからJPYCが日本国債を買いまくることになります。
ステーブルコイン発行が伸びない国の国債金利はこれからどんどん上がっていくでしょう。…
— 岡部典孝 JPYC代表取締役 (@noritaka_okabe) August 14, 2025
Okabe warned that countries that lag in stablecoin development risk higher bond interest rates, as they miss out on new sources of institutional demand. He emphasized that monetary policy considerations are driving governments, including Japan, to accelerate stablecoin frameworks.
Global Stablecoin Market Context
The global stablecoin market, dominated by dollar-pegged assets like Tether’s USDT and Circle’s USDC, has grown to over $286 billion. Japan’s entry into yen-based stablecoins could diversify this market and provide new liquidity channels within the country’s financial system.
Circle’s Entry into Japan with USDC
Japan’s approval of yen-backed stablecoins comes just months after Circle launched USDC in Japan on March 26, 2025, following regulatory approval to list the token on SBI VC Trade, a joint venture exchange between SBI Holdings and Circle Japan KK.
Circle said it also plans to expand USDC availability to Binance Japan, bitbank, and bitFlyer—two of which rank among the country’s largest crypto exchanges, each with more than 1.85 million monthly visits and daily volumes exceeding $25 million.
Outlook
If JPYC successfully rolls out later this year, Japan will join the ranks of major economies advancing fiat-backed digital currencies. The combination of yen-pegged stablecoins and global stablecoin players like Circle could bring Japan to the forefront of digital finance innovation, while also providing new support for its government bond market.
