Japan Yen Stablecoin JPYC: Redefining the Future of Financial Infrastructure

On October 27, 2025, Japan’s first yen-pegged stablecoin, JPYC, was officially issued.

Combining the reliability of traditional bank transfers with the speed and transparency of blockchain technology, this “digital yen” marks a pivotal step in redefining Japan’s financial infrastructure.

Under Japan’s Payment Services Act, JPYC is categorized as an “electronic payment instrument,” meaning it is legally distinct from crypto assets (virtual currencies). In August 2025, JPYC Inc. was registered with Japan’s Financial Services Agency (FSA) as a Type II Funds Transfer Service Provider, paving the way for the official launch of the JPYC stablecoin on October 27.

Each JPYC is redeemable 1:1 with the Japanese yen. During issuance or redemption, users deposit or withdraw funds through JPYC EX, the company’s official platform, which then issues or burns JPYC tokens on the blockchain accordingly.

The value of JPYC is fully backed by reserves held in bank deposits and Japanese government bonds. One of its defining features is its ability to facilitate low-cost, real-time transfers 24 hours a day, 365 days a year, with no basic transaction fees.

The stablecoin currently operates on Ethereum, Avalanche, and Polygon, with support for additional blockchains planned in future updates.

JPYC also adopts a non-custodial model, allowing users to manage their holdings directly through their own wallets rather than relying on third-party custodians.

Upon its launch, more than 15 million JPYC were issued within the first four hours, underscoring strong market interest and confidence in Japan’s first yen-based stablecoin.

Currently, issuance is capped at 1 million yen per person per day in accordance with Type II Funds Transfer regulations. However, the company has indicated plans to pursue a Type I license in the future, which would lift these issuance limits and expand the scale of operations.

The debut of JPYC not only signals Japan’s progress in regulatory innovation but also reflects a broader ambition to integrate blockchain-based financial infrastructure into the nation’s payment ecosystem—positioning JPYC as a potential cornerstone in the evolution of digital finance.

JPYC Inc. has clearly stated that its revenue model does not rely on transaction fees, but rather on the interest earned from managing reserve assets. The yen funds entrusted by users are invested primarily in safe, short-term government securities, and the interest income generated from these reserves forms the basis of the company’s business model.

Given the recent rise in global interest rates, this structure represents a rational and sustainable approach for a stablecoin issuer. According to CEO Daiki Okabe, JPYC aims to reach an issuance balance of 10 trillion yen within three years. Assuming an interest rate of around 1%, this would translate into an estimated annual revenue of approximately 100 billion yen—a projection that underscores the scale and potential of the business.

A growing number of domestic players are already planning to develop services utilizing JPYC, suggesting that the 10-trillion-yen issuance target may only be an interim milestone rather than a final goal.

Global Stablecoin Landscape

Internationally, the stablecoin industry has evolved into a major financial sector. In 2025, Circle, the issuer of USD Coin (USDC), successfully completed an IPO on the New York Stock Exchange, raising roughly $1.05 billion. As of late October, USDC’s market capitalization exceeded 11 trillion yen, with the company earning widespread trust through transparency—publishing monthly reserve reports and attestation statements verified by independent auditors.

Circle’s primary source of revenue also comes from interest on reserve assets. In the first quarter of 2025, the company reportedly earned $570 million (about 80 billion yen) in interest income alone, illustrating the profitability of this model in a higher-rate environment.

Meanwhile, J.P. Morgan has developed its own deposit token, JPMD, and launched a pilot program on Coinbase’s blockchain to tokenize U.S. dollar deposits. This initiative extends the earlier JPM Coin system, representing a move toward issuing interest-bearing stablecoins for institutional clients on public networks.

In Japan, Minna Bank is conducting trials in collaboration with Solana and Fireblocks, exploring the issuance of yen-denominated deposit tokens and integration with Web3.0 wallets. As such, both bank-led initiatives and non-bank models like JPYC are beginning to coexist and compete—laying the foundation for a multi-layered digital currency infrastructure in Japan.

Social and Industry Impact

The emergence of a privately issued digital yen alongside cash and traditional bank deposits marks a turning point in Japan’s financial system. For users, benefits include instant 24/7 settlement and zero transaction fees, while for businesses, it creates an open financial infrastructure that allows startups and enterprises alike to build interoperable financial services on the same platform.

Unlike traditional closed payment networks, this open model could serve as fertile ground for innovation. As CEO Okabe emphasizes, “The value lies not in JPYC itself, but in what can be built on top of it.” Encouragingly, numerous companies are already developing practical use cases.

Potential applications include real-time B2B settlements to improve liquidity management, machine-to-machine payments for AI-driven systems, and cross-border transactions that bypass intermediary banks—reducing international transfer costs significantly. Additionally, JPYC could enable tokenized real estate and securities settlement, where funds and assets can be exchanged instantaneously on-chain.

As a result, stablecoins like JPYC may enhance efficiency across the broader economy. Moreover, the longstanding issue of domestic payment networks halting during bank holidays could eventually disappear as “always-on payments” become standard practice.

Still, user adoption remains a key challenge. According to a recent survey conducted by J-CAM, only about 30% of Japanese crypto investors currently hold or use stablecoins. Because JPYC employs a non-custodial model, users must manage their own private keys—an entry barrier for less tech-savvy participants.

Maintaining trust and regulatory compliance will also be crucial. As seen with Circle’s monthly disclosure of reserve details and third-party attestations, Japan’s stablecoin issuers must similarly foster transparency and accountability to earn public confidence.

JPYC represents a major milestone in Japan’s emerging Web3.0 economy—an experiment in building digital financial infrastructure through private-sector innovation. The coming years will reveal whether JPYC can evolve from a pioneering initiative into a true foundation for Japan’s digital yen ecosystem, balancing technological progress and regulatory maturity in equal measure.

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