- The JPYC stablecoin makes its market debut this Monday.
- The asset issued by Japanese startup JPYC is pegged 1:1 to the yen.
- Most Japanese consumers still prefer traditional payment options, but a finance expert believes demand will catch up soon, especially overseas.
Japan’s first-ever yen-pegged stablecoin is out. Despite the Japanese consumers’ strong preference for traditional payment systems, an expert is confident that stablecoins will emerge as key players in global finance.
The JPYC Stablecoin Launch
According to Reuters, JPYC, a Japanese startup, launched its yen-pegged stablecoin bearing the same name on Monday. The company initially deployed the asset via Ethereum (ETH), Polygon (POL), and Avalanche (AVAX).
JPYC revealed that it plans to issue up to ¥10 trillion ($65.41 billion at prevailing rates) worth of the stablecoin over the next three years. It’s rumored that it will expand its support to broader blockchain ecosystems along the way.
Key Features of JPYC
JPYC designed its stablecoin to maintain a 1:1 peg to the Japanese yen. In compliance with existing laws, particularly with the country’s Payment Services Act, the company backed the digital assets with 100% physical reserves comprised of yen deposits and government bonds.
Upon rollout, JPYC will only be available on the JPYC EX platform. Some crypto exchanges will likely host the asset as demand catches on. Additionally, in adherence to regulations, users must first complete KYC (Know Your Customer) requirements at the JPYC EX to acquire the stablecoin.
Low Stablecoin Demand in Japan
There’s insufficient data about the actual demand for stablecoins in Japan. However, Reuters claims many consumers in the country still prefer traditional payment rails, specifically cash and credit card systems.
Nonetheless, JPYC CEO Noritaka Okabe believes the yen stablecoin’s fast and low-fee transactions will eventually turn the tide. He also thinks that startups will benefit the most from JPYC’s features.
“We hope to spur innovation by giving startups access to low transaction and settlement fees,” Noritaka told the press.
Moreover, Noritaka highlighted that their company is open to capital tie-ups to expand their global reach.
“Increasing global interoperability would benefit us too, so we’re open to capital tie-ups,” the CEO added.
Tomoyuki Shimoda, a professor of finance at Rikkyo University and former executive at the Bank of Japan (BoJ), admitted that yen stablecoins will unlikely gain the same market momentum as USD-based stablecoins. But then again, he forecasted that their demand could accelerate in three to four years if megabanks decide to adopt them, which could potentially cut their costs and time for cross-border payments and settlements.
The bullish sentiment toward yen stablecoins is further reinforced by the recent joint announcement of Japan’s biggest banks—the Mitsubishi UFJ Financial Group (MFUG), the Sumitomo Mitsui Financial Group (SMFG), and the Mizuho Financial Group—revealing that they have partnered for the development of their own yen stablecoin.
