The Japanese Financial Services Agency (FSA) is preparing to approve the issuance of yen-denominated stablecoins, signifying an important move for the country's financial sector.
What are JPYC Stablecoins?
JPYC stablecoins will be backed by liquid assets such as bank deposits and Japanese government bonds. Each JPYC will be pegged to 1 yen. The fintech company JPYC will register as a money transfer business within the month and will lead the rollout of the new stablecoin.
Potential Implications for the Bond Market
Okabe, a representative of JPYC, noted in a recent post that yen stablecoins could significantly affect Japan's bond market. He pointed out that in the US, leading stablecoin issuers have become major buyers of US Treasuries, and a similar trend in Japan could boost demand for Japanese government bonds. He stated, 'JPYC will likely start buying up Japanese government bonds in large quantities going forward.'
USDC Launch in Japan
In March 2023, Circle officially launched USDC in Japan after receiving approval for its listing on SBI VC Trade, a crypto exchange operated under a joint venture between SBI Holdings and Circle Japan KK. This marked the first time the FSA cleared a foreign-issued stablecoin under its regulatory framework.
The FSA's approval for the issuance of yen-denominated stablecoins signifies Japan's growing readiness to integrate digital currencies into its financial structures and may positively impact the country's financial market.
