Japan’s first domestic stablecoin issuer says that digital asset companies may soon play a major role in the country’s sovereign debt market, potentially influencing monetary policy.
JPYC, the Tokyo-based firm behind Japan’s first yen-pegged stablecoin, said that as stablecoin reserves grow, issuers could evolve into significant buyers of Japanese government bonds (JGBs).
In comments to Reuters, JPYC founder and CEO Noritaka Okabe suggested that stablecoin reserves could fill the gap left by the Bank of Japan (BOJ) as it slows its bond purchases.
JPYC launched its yen-backed token on Oct. 27 under Japan’s revised Payment Services Act, the country’s first legal framework for stablecoins. The company has issued roughly $930,000 worth of tokens so far and aims to reach $66 billion in circulation within three years. The token is fully convertible to yen, backed by a combination of bank deposits and JGBs, and designed for seamless movement across blockchain networks.
Stablecoin Issuers as New Bond Buyers
Okabe said JPYC plans to allocate 80% of its issuance proceeds to JGBs and 20% to bank savings, initially focusing on short-term securities. He added that the company could expand into longer-term JGBs as demand grows and yields remain attractive.
This approach could position stablecoin issuers as important players in Japan’s debt market, where the BOJ currently holds about half of the $7 trillion JGB market. As the central bank scales back purchases, new buyers will need to absorb the issuance, and stablecoin reserves could naturally help fill that vacuum, linking blockchain adoption to fiscal financing.
Okabe noted:
“The volumes of JGBs stablecoin issuers buy will be swayed by the balance of supply and demand for stablecoins… This trend will happen around the world, and Japan will not be an exception.”
Growing Stablecoin Adoption in Japan
Stablecoins are gaining traction in Japan’s traditional finance sector. On Friday, the Financial Services Agency (FSA) endorsed a yen-pegged stablecoin project led by the country’s largest financial institutions.
The initiative, called the Payment Innovation Project, involves Mizuho Bank, Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, Mitsubishi Corporation and its financial arm, along with Progmat, MUFG’s stablecoin issuance platform.
The FSA confirmed that the participating companies will begin issuing payment stablecoins this month, signaling broader adoption of digital assets in Japan’s regulated financial ecosystem.
