The world’s first stablecoin pegged to the national currency, the Yen, launched in Japan on Monday. This development marks a small yet significant step in a country where a large portion of consumers still prefers traditional payment methods such as cash and credit cards, reports Baltimore Chronicle with a link to Reuters.
The Japanese startup JPYC began issuing the digital assets, also named JPYC. These stablecoins are fully convertible to Yen and are backed by domestic savings and Japanese government bonds (JGBs). The company’s goal is to issue JPYC worth 10 trillion Yen (equivalent to $66 billion USD) over three years and ensure their widespread use abroad. Initially, the company does not plan to charge transaction fees to encourage adoption; instead, it aims to generate revenue from the interest earned on its holdings of JGBs.
At a press briefing, CEO Noritaka Okabe stated, “We hope to spur innovation by giving startups access to low transaction and settlement fees.” He added, “Increasing global interoperability would benefit us too, so we’re open to capital tie-ups.” Blockchain-based stablecoins are typically pegged to a fiat currency, offering faster and cheaper transactions. Bolstered by strong backing from U.S. President Donald Trump, stablecoins pegged to the U.S. dollar have surged and now account for over 99% of the global stablecoin supply, according to the Bank for International Settlements.
Global interest in stablecoins is accelerating. The Nikkei daily reported this month that Japan’s three largest megabanks will jointly issue stablecoins. However, Tomoyuki Shimoda, a former Bank of Japan executive and current academic at Japan’s Rikkyo University, suggested that Yen-backed stablecoins are unlikely to gain the same momentum as those backed by the U.S. dollar, the world’s global reserve currency. “There’s a lot of uncertainty on whether yen stablecoins will become widespread in Japan,” he commented. “If megabanks join the market, the pace could accelerate. But it could still take at least two to three years.”
Regulatory bodies have expressed concerns that stablecoins could facilitate the movement of funds outside regulated banking systems, potentially undermining the role of commercial banks in global payment flows. Ryozo Himino, Deputy Governor of the Bank of Japan, stated in a speech last week that “Stablecoins might emerge as a key player in the global payment system, partially replacing the role of bank deposits,” urging global regulators to adapt to these changes. Elsewhere in Asia, South Korea has promised to allow companies to introduce Won-based stablecoins, and China is also considering permitting the use of Yuan-backed stablecoins.
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