Japan’s FSA set to approve JPYC stablecoin
The Japanese Financial Services Agency (FSA), a government body that oversees banking, securities and the digital assets market in Japan, is gearing up to approve the country’s first stablecoin pegged to the yen.
Local media platform Nikkei reported on Aug. 18 that it is anticipated that the FSA will approve the issuance of the JPYC stablecoin in the coming months.
Efficient payment infrastructure
JPYC, Inc. was founded by Noritaka Okabe in 2019, establishing the JPYC yen-pegged stablecoin in 2021. Okabe believes that the company can better enable innovation in Japan through a more efficient payment infrastructure that JPYC claims to provide via its stablecoin.
Prior to launching the stablecoin, JPYC had entered into proof-of-concept and regulatory discussions with the FSA. The JPYC stablecoin has almost complete market dominance within its domestic market, with stablecoins to the value of 30 billion yen ($202.7 million) having been issued.
In 2022, JPYC registered with the FSA as a third-party prepaid payment instrument service provider. It’s understood that the company will seek registration once again within the month, this time as a money transfer business.
Japan’s Payment Services Act recognizes the issuance of stablecoins by banks, trust companies and money transfer businesses. JPYC backs its stablecoin with liquid assets such as Japanese government bonds and bank deposits.
Growing stablecoin importance
On a global basis, the leaders in terms of stablecoin market capitalization are Circle (USDC) and Tether (USDT), both U.S. dollar-pegged stablecoins. The U.S. recently enacted its GENIUS Act stablecoin legislation with many politicians and market commentators taking the view that USD-pegged stablecoins will promote ongoing use of the U.S. dollar internationally.
U.S. Treasury Secretary Scott Bessent took to X on Aug. 18 on that topic, stating:
”Stablecoins will expand dollar access for billions across the globe and lead to a surge in demand for U.S. Treasuries, which back stablecoins.”
Foreign governments are starting to see the significance of supporting stablecoins pegged to their country’s sovereign currency. The ongoing development of U.S. dollar-pegged stablecoins has not escaped the attention of Chinese officials. In July, government officials in Shanghai held a meeting to explore policy strategies for stablecoins. The same month, Darryl Chan, Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA), said the authority was likely to issue its first stablecoin license in early 2026. His comments preceded the rollout of Hong Kong’s stablecoin regulatory framework on Aug. 1.
Last week, JPYC’s Okabe said that JPYC would soon start "buying up Japanese government bonds.” He added, “The interest rates on government bonds in countries where stablecoin issuance does not grow will likely continue to rise. It’s no exaggeration to say that the interest rates on Japanese government bonds rest on JPYC’s shoulders.”
Okabe is also going out of his way to draw a clear distinction between his company’s stablecoin and cryptocurrency. On X, he stated that “JPYC is an electronic payment method, not a cryptocurrency.” He went on to assert that given that the JPYC stablecoin is a currency-denominated asset whose value is linked to fiat currency, it incorporates the best qualities of both digital cash and deposits.
