The stablecoin race in Japan is heating up as three “giants” of banking – Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho – announced plans for a joint issuance of stablecoins pegged to the yen and the US dollar for corporate payments. After Japan amended the Payment Services Act in 2023, only licensed banks and organizations can issue stablecoins.
The fintech startup JPYC has become the first entity to be licensed for the issuance of a yen-pegged stablecoin, ensuring a 1:1 conversion rate and backed by bank deposits and government bonds. The amendment in 2025 allows 50% of reserves to be in low-risk assets, making the model more sustainable. Although the old legal system still prevails, the stablecoin promises to shorten cross-border transactions to just a few seconds and reduce costs by up to 99%, ushering in a new era of digital finance for Japan.
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