Japan’s Financial Services Agency (FSA) is preparing to approve the country’s first yen-pegged stablecoin as early as this fall, according to a report by Nikkei on Sunday.
The stablecoin, issued by Tokyo-based fintech company JPYC, will be backed by deposits and government bonds to ensure stability and liquidity. JPYC has announced plans to register as a money transfer business with the FSA within August, with a token sale expected to begin the following week.
Backed by liquid assets and hedge fund interest
To maintain its peg to the yen, JPYC’s stablecoin will be supported by highly liquid assets such as bank deposits and government securities. The token is designed to serve multiple use cases, including cross-border remittances, corporate transactions, and integration into decentralized finance (DeFi) platforms.
JPYC aims to issue up to 1 trillion yen ($6.78 billion) worth of its stablecoin over the next three years. The company has already drawn interest from hedge funds that see potential in the project’s stability and regulatory compliance, the report noted.
Japan’s evolving stablecoin regulation
Japan has been proactive in shaping its digital asset framework. In June 2022, the country amended its Payment Services Act to officially recognize fiat-pegged stablecoins as “Electronic Payment Instruments.” The legislation stipulated that only licensed banks, trust companies, and registered service providers could issue such stablecoins. By 2023, stablecoins were further defined under law as “currency-denominated assets,” reinforcing their role within the financial system.
The FSA’s expected approval of JPYC could mark a pivotal moment for Japan’s digital asset market, potentially setting the stage for broader adoption of regulated stablecoins in Asia.
Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.
AloJapan.com