Japan has launched the world’s first stablecoin pegged to the yen, marking a significant step in the country’s efforts to modernize its payment system, which is still heavily reliant on cash and credit cards.
The JPYC startup said the stablecoin will be fully backed by domestic savings and Japanese government bonds (JGBs), and can be redeemed 1-for-1 with yen.
The stablecoin, also known as JPYC, will not charge any transaction fees in its initial phase to accelerate the adoption of the digital asset, instead generating income through the interest on JGB holdings.
The stablecoin was created to maintain a stable value by pegging its price to a real-world asset, aiming to combine the advantages of fast and secure blockchain technology with the stability of fiat currencies.
The launch in Japan comes after US President Donald Trump expressed open support for the digital asset sector, fueling interest in blockchain integration in mainstream finance.
China is also reportedly considering the use of a yuan-backed stablecoin, demonstrating the global momentum towards wider and more cost-effective adoption of digital assets.
According to a Nikkei report, three major Japanese banks are also planning to issue their own stablecoins, which could accelerate the adoption of digital assets in a previously cash-loving society.
Currently, US dollar-based stablecoins still dominate with more than 99 percent of global supply, according to data from the Bank for International Settlements.
In Asia, Japan is set to begin allowing the issuance of stablecoins through a regulatory framework in 2023, while South Korea is also planning to pave the way for won-based stablecoins.
However, authorities remain cautious. The biggest concern is that stablecoins could shift funds outside the traditional banking system and potentially change the role of financial institutions in global payments flows.
