Japanese fintech startup JPYC has launched the world’s first yen stablecoin.
JPYC announced the news on the 27th. The company states that this token can be exchanged 1:1 in value with the Japanese yen, and its value is backed by domestic savings in Japan and Japanese Government Bonds (JGBs).
The company said that transaction fees are waived in the initial phase to expand usage, and it will earn interest income through holding government bonds.
According to an earlier report by Nikkei, Japan’s three major banks also plan to jointly issue a stablecoin, which may further push this type of digital asset into the mainstream market. Japan’s financial system has long been dominated by cash and credit cards.
A stablecoin is a digital token pegged to at least one fiat currency or gold, aiming to maintain a stable value.
Many countries are moving into stablecoins, global acceptance of digital currencies is rising, and the potential of blockchain within mainstream financial systems is once again in the spotlight.
Currently, dollar-pegged stablecoins hold more than 99% of the global market share.
Among other Asian countries, Japan established the first stablecoin regulatory framework in 2023, and South Korea has also announced that it will allow companies to issue won-pegged stablecoins. China is also considering allowing the use of RMB stablecoins, but overall remains relatively cautious.
However, some policymakers are concerned that stablecoins may allow funds to flow outside of the regulated banking system and undermine the position of commercial banks in the global payments system.
Shitara Tomoyuki, a scholar at Rikkyo University and former central bank executive, predicts that the adoption of yen stablecoins in Japan remains uncertain and will likely take around 2 to 3 years. If the three major banks enter the market, the adoption speed might increase.