Japan launches yen stablecoin, plans to issue 100 trillion yen in three years.

The world's first stablecoin pegged to the yen was launched in Japan on Monday, marking a significant move for a country where many consumers still prefer to use traditional payment methods such as cash and credit cards. The Japanese startup company JPYC began issuing a stablecoin called JPYC, which can be fully exchanged with the yen and is backed by domestic savings and Japanese government bonds (JGBs). The company plans to issue JPYC worth 10 trillion yen (about $66 billion) within three years and to widely use this digital asset overseas. To encourage people to use JPYC, the company initially does not plan to charge transaction fees but hopes to make money through interest on holding Japanese government bonds. JPYC CEO Noritaka Okabe said at a press conference, "We aim to stimulate innovation by allowing startups to enjoy low transaction and settlement costs." He added, "Improving global interoperability will also benefit us, so we are open to capital cooperation." Blockchain-based stablecoins are typically pegged to fiat currencies and offer faster and cheaper transactions. According to data from the Bank for International Settlements, stablecoins pegged to the dollar, supported by then-US President Trump, have surged and now account for over 99% of global stablecoin supply. According to local media reports this month, global interest in stablecoins is also growing, with Japan's three major banks planning to jointly issue stablecoins. Former Bank of Japan executive and current Rikkyo University scholar Tomoyuki Shimoda said that yen stablecoins may not have the same momentum as stablecoins supported by the dollar, the globally used reserve currency. He stated, "There is still a lot of uncertainty about whether yen stablecoins will become popular in Japan. If large banks enter the market, this process could speed up. But this may still take at least two to three years." Policymakers are concerned that stablecoins may lead to funds flowing outside regulated banking systems and potentially weaken the role of commercial banks in the global payment flows. Bank of Japan Deputy Governor Ryozo Himino said in a speech last week, "Stablecoins may become key participants in the global payment system, partially replacing the role of bank deposits," and urged global regulators to make adjustments. In other parts of Asia, South Korea has pledged to allow businesses to introduce stablecoins based on the won.