JPYC stated that it aims to issue 10 trillion yen ($66 billion) worth of stablecoins, which are also called JPYC, over a three-year period and hopes to soon take these coins overseas.
Japan is set to launch the world’s first Yen-pegged Stablecoin, marking the beginning of major fintech developments in a country where the financial landscape is dominated by traditional payment means like cash and cards. Issued by a start-up, JPYC, these stablecoins will not only be fully convertible to the Yen but also supported by domestic savings and Japanese government bonds (JGB).
JPYC stated that it aims to issue 10 trillion yen ($66 billion) worth of stablecoins, which are also called JPYC, over a three-year period and hopes to soon take these coins overseas. The company said that initially it will not be charging a transaction fee, to push its usage and plans to generate earnings from interest on holdings of JGBs.
Japan had issued permits to financial institutions to allow the issuance of stablecoins in 2023, and earlier this month, the country’s top three banks announced that they will jointly issue stablecoins. These banks include Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group, which have a vision to build the required infrastructure so that their corporate clients will have a uniform procedure to make payments using stablecoins. The banks said that while they will begin with issuing a Yen-backed stablecoin, they could soon introduce the US dollar-pegged coins too.
Just last week, Ryozo Himino, Deputy Governor, Bank of Japan, said that global regulators must adapt to the changes in the financial sector. He emphasised that regulators must consider increasing the asset ratio held by non-bank financial institutions and also make room for the emergence of digital payment assets like cryptocurrencies.
Himino also said that these digital currencies could soon emerge as top players in the international payments infrastructure and have the potential to replace bank deposits. While there have been delays in implementing the Basel 3 regulations on banking systems, G20 economies have not shirked away from their commitment to do so, adding that half the assets now owned by non-bank financial institutions do not fall under the purview of Basel 3, highlighting the changes in the global financial system.
Around the world, there is a renewed interest in blockchain and governments and fintech companies alike are working to bring cryptocurrency into the mainstream financial network. The sector received a boost since US President Donald Trump’s open declaration that he intends to be a ‘crypto President’ and has promised more crypto-friendly regulations in the US.
The Bank for International Settlements has assessed that, owing to support from Trump, dollar-backed coins now account for 99% of the global stablecoin supply. However, the tides could soon change, as the global interest in crypto is increasing and more and more countries are working towards bringing digital payment assets into the mainstream financial network.
In August, news broke that China was deliberating allowing Yuan-pegged stablecoins to be used and increase the global usage and adoption of its currency. This marked a total turnaround for the country, as Chinese policymakers had previously held anti-crypto opinions.
However, this joy was short-lived, as soon after, in October, tech companies like Alibaba-backed Ant Group and e-commerce group JD.com had to put their stablecoin ambitions on hold in Hong Kong after Beijing-based officials flagged concerns regarding the rise of currencies in the private sector’s control.
Regardless of China’s hesitation, other Asian countries like Japan and South Korea are working to expand the integration of cryptocurrencies into their financial infrastructure. Market analysts have accepted that the stablecoin momentum in Japan will not be as fast-paced as its US counterpart. However, they have maintained that with the backing of big banks, the adoption of these assets could be accelerated in another two or three years.
