The world’s third-largest economy entered the stablecoin race with the world’s first yen-pegged stablecoin. [NEWS]
JPYC is now active on Avalanche, Ethereum, and Polygon. But with 10-year JGB yields at just 1.65%, JPYC’s thin-margin seigniorage model faces heightened stability risk, making yen-backed stablecoins structurally weaker than dollar-backed ones.
Let’s unpack what this means for global FX rails, de-dollarization, and the future of sovereign stablecoins.
JPYC, a Tokyo-based startup, has launched the first-ever yen-backed stablecoin, fully convertible to Japan’s national currency and backed by savings and Japanese Government Bonds (JGBs). Live on Avalanche, Ethereum, and Polygon, JPYC plans to issue up to ¥10T ($66B) over three years, initially waiving fees and earning profit from JGB interest.
Zooming in: To scale, JPYC is partnering with MUFG’s compliant Progmat platform, transitioning to a Trust-Type structure where MUFG will custody reserves.
The adoption curve: Unlike dollar-backed tokens, yen stablecoins lack reserve currency momentum. Early traction will likely centre on Asian trade flows and multinational settlement systems, helping Japanese firms reduce dependence on USD rails.
Stepping back: In 2024, Japan’s three megabanks piloted Project Pax, a SWIFT-integrated stablecoin platform by Progmat and Datachain, to enable faster, cheaper, and compliant cross-border payments, targeting Japan’s 300,000+ corporate clients.
