Japan Welcomes First Fully Yen-Convertible Stablecoin, JPYC, Marking Digital Finance Milestone

Japanese startup JPYC has officially launched the world's first stablecoin fully convertible to the Yen, a significant development for the nation's financial landscape. The digital currency, also named JPYC, became available on Monday, October 27, 2025, according to reports from The Japan Times and CoinCentral. This initiative aims to integrate blockchain technology into Japan's traditionally cash-dominated financial system.

The JPYC stablecoin is meticulously designed to maintain a 1:1 peg with the Japanese Yen, ensuring stability and reliability for users. Its value is 100% collateralized by a robust reserve of bank deposits and Japanese government bonds (JGBs), as confirmed by dropstab and Coinpaper. This strong backing adheres to Japan's stringent regulatory framework for digital assets.

Noritaka Okabe, CEO of JPYC, described the launch as a "major turning point in the history of the Japanese currency," The Japan Times reported on October 27, 2025. The company received the necessary licensing in August 2025, following Japan's revised Payment Services Act of June 2023, which established a clear legal framework for stablecoins.

The introduction of JPYC is expected to accelerate financial innovation and offer faster, cheaper transactions compared to traditional payment methods. PYMNTS.com noted on October 27, 2025, that JPYC hopes to spur innovation by providing startups with access to low transaction and settlement fees. The company also aims for wider international use of the asset.

To encourage widespread adoption, JPYC will initially waive transaction fees, generating revenue instead from the interest earned on its holdings of Japanese government bonds, as reported by The Hindu on October 27, 2025. This strategic approach highlights the company's long-term vision for establishing JPYC as a foundational digital asset.

JPYC has set an ambitious target to issue a total of ¥10 trillion (approximately $66 billion) worth of stablecoins within the next three years, according to Kazinform News Agency. This goal underscores the startup's confidence in the potential for yen-pegged digital currencies to reshape the financial ecosystem in Japan and beyond.

The launch comes amidst a growing global interest in stablecoins, with the market capitalization exceeding $308 billion, primarily dominated by dollar-pegged assets, Cointelegraph stated on October 27, 2025. JPYC's entry positions Japan as a key player in the evolving digital currency landscape.

• The JPYC stablecoin is backed by a full reserve of bank deposits and Japanese government bonds, ensuring its 1:1 peg to the Japanese Yen. This robust collateralization strategy is crucial for maintaining stability and investor confidence, a lesson learned from past stablecoin volatility, as highlighted by The Japan Times on October 27, 2025. The company's main business model relies on generating profit from the interest on these reserves.
• Japan's proactive regulatory stance, culminating in the revised Payment Services Act of June 2023, paved the way for JPYC's launch. This legislation defines stablecoins as "currency-denominated assets" and mandates that they be issued by licensed banks, trust companies, or money transfer agents, according to vixio. JPYC Inc. registered with Japan's Financial Services Agency (FSA) in August 2025 as a fund transfer service provider, making it the first legally authorized issuer.
• The JPYC stablecoin operates on multiple blockchains, including Ethereum, Avalanche, and Polygon, facilitating instant yen transfers with near-zero fees, as detailed by TradingView on October 27, 2025. Users can acquire JPYC through the dedicated JPYC EX platform, which requires identity verification via Japan's My Number card, ensuring compliance with anti-money laundering regulations.
• The launch of JPYC is expected to invigorate Japan's fintech ecosystem and attract significant investments, enhancing the country's position in the global cryptocurrency market, Cointelegraph reported. Economists suggest that the need for JGBs as collateral for JPYC could increase demand for these bonds, potentially influencing domestic bond markets and enhancing liquidity, according to Economy Middle East on October 27, 2025.
• While JPYC marks a significant step, competition is on the horizon. Japan's three largest banks—Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corp., and Mizuho Bank—are planning to jointly launch their own yen-pegged stablecoin system on October 31, 2025, via MUFG's Progmat platform for corporate settlements, CoinCentral noted. Monex Group also announced plans in August to introduce its own yen-pegged stablecoin.
• Despite the enthusiasm, some caution remains regarding the widespread adoption of yen stablecoins in Japan, a country known for its preference for cash. Tomoyuki Shimoda, a former Bank of Japan executive and academic at Rikkyo University, expressed uncertainty, suggesting that widespread use might take two to three years, even with megabank involvement, as reported by The Times of India on October 27, 2025. Bank of Japan Deputy Governor Ryozo Himino also voiced concerns about stablecoins potentially bypassing traditional banking channels.
• JPYC's strategic goal extends beyond domestic use, aiming for global interoperability and a reduction in Asia's reliance on U.S. dollar-backed stablecoins. ccn.com reported on October 27, 2025, that by introducing a regulated, blockchain-based yen instrument, JPYC could help digitize and decentralize foreign exchange flows in a region where a significant portion of trade settlements are still dollar-denominated. This could position the yen as a more prominent currency in digital transactions.
• The company, JPYC Inc., founded in 2019, has been planning stablecoin businesses since its inception and is backed by New York's Circle, the issuer of the USDC stablecoin, The Japan Times confirmed. JPYC's prior experience operating a prepaid digital payment service since 2021 laid the groundwork for its compliance and market understanding, according to icobench on October 27, 2025.