The world’s first stablecoin pegged to the yen made its debut in Japan on Monday. A startup called JPYC said it will begin issuing stablecoins that are fully convertible to the yen, and backed by domestic savings and Japanese government bonds (JGB), adding that it will initially not charge transaction fees for its stablecoins.
Digital currency is typically pegged to a fiat currency and offers faster and cheaper transactions. It’s a unique change for a country that’s traditionally known to have a cash-loving population. Globally, however, stablecoins, which are backed by the US dollar and famously supported by US President Donald Trump, account for over 99 per cent of the global stablecoin supply, according to the Bank for International Settlements.
Japan’s three megabanks will also jointly issue stablecoins, a Japanese daily had reported earlier this month. This follows the country laying out rules in 2023 to allow issuance of stabecoins.
However, the island nation’s policymakers remain wary of stablecoins, saying they could facilitate the movement of funds outside regulated banking systems and lead to undermining the role of commercial banks in global payment flows.
“Stablecoins might emerge as a key player in the global payment system, partially replacing the role of bank deposits,” said Ryozo Himino, Deputy Governor of the Bank of Japan, in a speech last week. He also urged global regulators to adapt to new realities in the financial system.
Also Read: US House clears bill regulating stablecoin
Japan’s tryst with digital innovation has grown in the last decade, with ratio of cashless payments having risen to 42.8 per cent in 2024 from 13.2 per cent in 2010, as per government data.
Anaysts say it could take at least two to three years for yen stablecoins to become widespread in Japan. Elsewhere, South Korea has also pledged to allow companies to introduce won-based stablecoins. China, too, is considering allowing usage of yuan-backed stablecoins.
On Saturday, Kyrgyztan launched a national stablecoin and a central bank digital currency in partnership with cryptocurrency exchange, Binance, President Sadyr Japarov said on Saturday.
Changpeng Zhao, the founder of cryptocurrency exchange, Binance, was appointed as an advisor on digital assets to the president of Kyrgyztan in May.
Zhao said in a post on X on Saturday that the Kyrgyz national stablecoin had been launched on the BNB Chain and that the digital version of Kyrgyztan’s currency, the som, was ready for use in government payments.
A national cryptocurrency reserve had also been established, he said, which includes Binance’s BNB token.
A5A7, a stablecoin backed by the Russina rouble, is based in Kyrgyztan. However, it has been placed under sanctions by Western governments, who say it is used to facilitate avoidance of sanctions on Russia over its Ukraine war.
Meanwhile, US President Donald Trump on Friday pardoned Zhao, who was previously convicted of money-laundering related offences.
Kyrgyztan is a mountainous former Soviet republic with a population of about 7 million people who depend on labour migrants in Russia.
In recent years, it has positioned itself as a cryptocurrency leader in Central Asia.
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