Japan Issues World’s First Yen-Pegged Stablecoin “JPYC”

Photo Credits: The Japan Times / Reuters

Tokyo Monday: A Japanese startup, JPYC Inc., has formally issued the world’s first stablecoin pegged to the Japanese yen, named “JPYC,” the short form of Japanese Yen stablecoin, marking a new phase in Japan’s digital-currency initiatives.

The token is backed one-for-one by yen deposits and fully backed reserves, including Japanese Government Bonds (JGBs).

JPYC Inc. said it will not charge transaction fees initially and plans to generate revenue from yield on its JGB holdings.

JPYC Inc. has set a target issuance of ¥10 trillion (approximately US$66 billion) over the next three years.

The token is available on multiple blockchain networks, including Ethereum, Polygon and Avalanche. 

During a news briefing, CEO Noritaka Okabe said:

“We hope to spur innovation by giving startups access to low transaction and settlement fees,” and added that the firm is “open to capital tie-ups” for global interoperability.

Japan’s central bank deputy governor Ryozo Himino warned that stablecoins could “emerge as a key player in the global payment system, partially replacing the role of bank deposits.”

Former Bank of Japan executive Tomoyuki Shimoda commented that “There’s a lot of uncertainty on whether yen stablecoins will become widespread in Japan.”

The decision comes after Japan’s stablecoin regulations were clarified earlier this year, paving the way for legal issuance under the Payment Services Act.

Meanwhile, Japan’s three largest banks (Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group) are reported to be preparing joint stablecoin issuance initiatives.

The launch arrives at a time when U.S. dollar-pegged stablecoins account for more than 99 % of global supply, according to the Bank for International Settlements.