Japan to Approve Yen Stablecoins for First Time This Fall

- Japan to authorize its first legal yen-backed stablecoins this fall. - JPYC Inc. to lead initiative with coins backed by bank deposits and government bonds. On August 17, 2025, multiple outlets including TradingView, AInvest, and Cointelegraph reported that Japan's Financial Services Agency (FSA) will approve the country’s first yen-backed stablecoins in fall 2025. Tokyo-based fintech firm JPYC Inc. is taking charge of the initiative and plans to register as a money transfer operator to issue these stablecoins, which will be pegged to the Japanese yen. The stablecoins aim to revolutionize international remittances by offering a faster, more cost-effective alternative to address persistent challenges in global financial transactions. While dollar-backed tokens such as USDC and Tether currently dominate the stablecoin market, Japan’s move to introduce yen-backed options signals a significant step toward diversifying this space. JPYC will back its stablecoins with a combination of Japanese bank deposits and government bonds to maintain a fixed value of 1 yen per token. The company plans to generate profits from interest accrued on the government bonds; however, it will not distribute these earnings to stablecoin holders. Despite the promise of efficiency and innovation, this initiative comes with inherent risks. A representative from JPYC noted that the stablecoin could depeg from the yen in secondary markets if the underlying government bonds lose value or liquidity. In such a scenario, JPYC will bear the financial responsibility for addressing any discrepancies. However, users will retain the option to redeem stablecoins directly with JPYC for their full yen equivalent, which provides a safety mechanism to stabilize the token’s price. According to CoinMarketCap, as of 12:00 UTC on August 17, Ethereum (ETH) was trading at $1,920, with a 1.7% increase in 24-hour trading volume.