Japan’s stablecoin industry is beginning to reshape the country’s $9 trillion government bond market as the Bank of Japan (BOJ) eases its bond-buying program. With the central bank slowly reducing its presence, private stablecoin issuers like JPYC are emerging as potential new players in sovereign debt markets.
JPYC, the Tokyo-based company behind Japan’s first yen-pegged stablecoin, launched its token on October 27 under the revised Payment Services Act the country’s first legal framework for stablecoins. Backed by bank deposits and Japanese government bonds (JGBs), the token is fully convertible to yen and designed for smooth transfers across blockchains.
Founder and CEO Noritaka Okabe told Reuters that stablecoin issuers could soon rival the BOJ as major JGB holders. JPYC aims to invest 80% of its reserves in government bonds and 20% in bank deposits, targeting up to 10 trillion yen ($66 billion) in circulation within three years.
Japan’s Financial Services Agency (FSA) is also supporting stablecoin innovation, backing a pilot with the nation’s top three banks MUFG, SMFG, and Mizuho to issue yen-backed tokens for corporate clients.
Okabe said JPYC could reduce Japan’s reliance on dollar-pegged stablecoins, strengthen the yen’s global role in digital finance, and foster a regulated path toward a digital yen.
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