JPYC, The First Stablecoin In The World Based On Yen Ready To Compete With Digital Dollars

JAKARTA Japan officially launched the world's first stablecoin pegged directly into yen currency. This move marks a new chapter in Japan's digital financial system, which has been known to rely heavily on conventional payments such as cash and credit cards.

The stablecoin was published by the JPYC startup, which named its digital asset the same name: JPYC. This coin can completely be converted to Japanese yen and guaranteed with domestic deposits and Japanese government bonds (Japanese Government Bonds/JGB).

JPYC is targeting issuance of up to 10 trillion yen or about 66 billion US dollars (equivalent to Rp1,078 trillion) in the next three years, with ambitions for JPYC to be widely used in the international market. To encourage early adoption, JPYC will not charge transaction fees, and will benefit from interest on Japanese government bond holdings.

"We want to encourage innovation by providing access for startups to enjoy very low transaction fees and settlements," said JPYC CEO Noritaka Okabe, at a press conference. We are also open to capital cooperation to expand global interoperability," he added.

Blockchain-based stablecoins like JPYC are designed to keep their value stable against fiat currencies and allow for faster and cheaper transactions. The surge in US dollar stablecoins, which now controls more than 99% of the global stablecoin supply thanks to strong support from US President Donald Trump, has inspired other countries to compete in the arena.

According to a Nikkei daily report, Japan's three largest megabanks are also planning to jointly issue stablecoin yen in the near future. However, a number of academics believe the adoption of stablecoin yen will not be as fast as the US dollar, given yen is not a world reserve currency.

There is still a lot of uncertainty as to whether stablecoin yen could expand widely in Japan, said Tomoyuki Shimoda, a former executive of the Bank of Japan (BOJ) who is now an academic at Rikkyo University. If big banks enter the market, adoption can be faster, but it still takes two to three years.

The Bank of Japan itself recognizes the huge potential of stablecoins in the global payment system. BOJ Deputy Governor Ryozo Himino said stablecoins could be key players who partly replace bank deposit roles. However, he also warned global regulators to adapt quickly to prevent potential risks to the financial system.

Apart from Japan, South Korea has committed to allowing the launch of won-based stablecoins, while China is considering implementing a yuan-based stablecoin.

With the launch of JPYC, Japan is now at the forefront of Asia's digital financial innovation bringing yen to a new era where traditional currencies and blockchain are starting to co-exist.