Japan Reportedly Set to Launch First Yen-Pegged Stablecoin This Autumn

• The decision is made at a time when the global stablecoin market has grown to over $286 billion.
• A spokesperson of the JPYC issuing business, Okabe, recently made a post on X stating that yen stablecoins may significantly impact Japan’s bond market.

Stablecoins linked to the yen might be issued by Japan’s Financial Services Agency (FSA) as early as this autumn, making history as the nation prepares to permit a domestic fiat-pegged digital currency for the first time.

Japanese news source The Nihon Keizai Shimbun said on Sunday that JPYC, a fintech startup located in Tokyo, would register as a money transfer business within the month and will spearhead the launch.

With the support of very liquid assets like bank deposits and Japanese government bonds, JPYC is structured to keep its value constant at 1 JPY = 1 yen. Digital wallets get tokens by bank transfer after purchase applications from individuals or organizations.

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The decision is made at a time when the global stablecoin market has grown to over $286 billion, with dollar-pegged assets like as USDT and Circle’s USDC dominating. Japan has already seen dollar stablecoins, but this will be their first offering based on the yen.

A spokesperson of the JPYC issuing business, Okabe, recently made a post on X stating that yen stablecoins may significantly impact Japan’s bond market. In the United States, he said, prominent stablecoin issuers have started buying up US Treasury in bulk to use as collateral for their tokens in circulation.

If JPYC becomes widely used, he said, a like pattern in Japan may increase demand for JGBs. He predicted that JPYC would begin purchasing Japanese government bonds in bulk in the future.

Since they are missing out on a new category of institutional demand, governments who are slow to create stablecoins run the danger of seeing their government bond interest rates rise, as pointed out by Okabe. He maintained that countries, including as Japan’s, are now pushed to speed up stablecoin frameworks by monetary policy concerns.

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