While the US celebrates the GENIUS Act as a catalyst for stablecoin adoption, Japan's experience shows that clarity in regulation does not always lead to immediate real-world utility.
Regulation of Stablecoins in Japan
In 2023, Japan introduced the world’s first comprehensive stablecoin regulation, but adoption has been muted. Licensed issuers exist only on paper, and a yen-backed stablecoin economy is yet to thrive. Takashi Tezuka, country manager at Startale Group, noted a difference in approaches: "The GENIUS Act was greeted with a mix of relief and curiosity because the US has finally caught up with Japan two years earlier by establishing a comprehensive legal framework around stablecoins."
Japan's First Stablecoin
Japan is set to approve its first yen-backed stablecoin this year, which will allow blockchain-based remittances and payments in its national currency. The stablecoin is to be issued by local fintech company JPYC and will be fully collateralized by bank deposits and Japanese government bonds.
Growing Popularity of Stablecoins in Japan
Startale has been pushing for greater stablecoin adoption in Japan, culminating in a partnership with financial giant SBI to build a platform for tokenized stocks and other real-world assets. "The goal is to give institutional and retail investors the tools to trade tokenized assets, including US and Japanese native stocks," Tezuka stated.
Thus, despite clarity in regulation, Japan needs to develop its stablecoin economy to adapt to sustainable financial instruments and meet market demands.
