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Japanese startup JPYC has launched the first stablecoin pegged to the yen, backed by domestic savings and Japanese government bonds.
JPYC announced on Monday the launch of its yen-backed stablecoin, also called “JPYC.” A stablecoin is a cryptocurrency pegged to a fiat currency, and at present, the sector is heavily dominated by tokens tied to the US Dollar, with USDT and USDC alone accounting for the majority of the market.
Japan is now also dipping into the space with this new stablecoin. According to JPYC, the token will be backed 1:1 by domestic deposits and Japanese government bonds (JGBs). Users can buy or sell the asset through JPYC EX, the Japanese startup’s official platform. The company is offering zero fee on issuance and redemption for now, instead turning to the interest from the JGBs as a source of income.
The token is initially becoming available on Ethereum, Avalanche, and Polygon, with support for additional blockchains planned. According to Reuters, JPY is aiming to issue 10 trillion yen worth of the stablecoin over the next three years. At the current rate, this target is equivalent to about $65.5 billion.
USDC, the second-largest fiat-tied token in the sector, has a market cap of about $76.3 billion right now. Thus, if JPYC meets its ambitious target, it could potentially rival the USD-ruled stablecoin market. The JPYC launch isn’t the only stable-related development that has occurred in Japan recently. As reported by Bitcoinist, three Japanese megabanks are planning to issue a yen-backed token by the end of 2025.
The banks in question are Mitsubishi UFJ Financial Group (MUFG) Bank, Sumitomo Mitsui Banking Corp., and Mizuho Bank. Together, they serve over 300,000 clients.
Institutional interest in cryptocurrencies has been rising in the East Asian country recently as the government is considering a regulatory rule change that would allow banks to hold Bitcoin and other digital assets for investment purposes, and register themselves as “crypto exchange operators,” becoming able to offer trading services to customers.
While Japan has been moving in a crypto-positive direction, China has remained cautious, offering impediments to stablecoin plans in Hong Kong, according to Financial Times.
The Chinese city launched its stablecoin legislation earlier in the year and received enquiries from multiple tech giants for an issuer license. Mainland regulators, however, have urged the companies to halt their plans, raising concerns about the growth of currencies controlled by the private sector.
Globally, digital assets pegged to fiat currencies have continued to enjoy capital inflows recently despite Bitcoin and altcoins facing volatility. As the chart shared by institutional DeFi solutions provider Sentora shows, the sector has seen its market cap break a record of $308 billion.
At the time of writing, Bitcoin is trading around $115,200, up nearly 4% over the last week.
