Japan’s financial group SBI Holdings and blockchain firm Startale Group have introduced JPYSC, a Japanese yen–pegged stablecoin designed mainly for institutional and cross-border transactions.
This is a significant shift in the Japanese stablecoin industry, as it is the first trust bank-supported stablecoin, with the issuance process managed by SBI Shinsei Trust Bank, in accordance with Japanese digital asset regulations. The distribution of the token will be managed by crypto exchange SBI VC Trade, while Startale is in charge of the development.
The partners say JPYSC aims to strengthen the yen’s role in digital finance by offering a regulated alternative to U.S. dollar-based stablecoins.
Early interest from institutions shows that the new stablecoin could be helpful for payments and treasury operations. Another farfetched use that can be considered by the government is settling debts between countries.
The launch comes at a time when the Japanese stablecoin market has seen a steady rise from the past five years, backed by user base surge and government policies.
Startale CEO says JPYSC aims beyond simple payments
Sota Watanabe, CEO of Startale Group, said the planned yen-backed stablecoin JPYSC is meant to do much more than enable simple payments.
According to him, the stablecoin could play a key role in a future where financial activity increasingly happens on blockchain networks.
He pointed to emerging use cases such as automated payments between AI systems and distributing tokenized assets as examples of how digital finance is evolving.
The project represents a larger trend towards on-chain economies, in which stablecoins play a central role as financial infrastructure. JPYSC is set to go live in the second quarter of this year, subject to regulatory approval.
Japan’s stablecoin market sees steady rise
In recent years, Japan has taken steady steps to bring regulated stablecoins into its mainstream financial system.
In 2022, the country changed its Payment Services Act to say that fiat-backed stablecoins are “Electronic Payment Instruments.”
This made it easier for digital payments to become popular and for new ideas to come up.
However, progress in regulation was made in October last year when regulators approved the yen-backed stablecoin of fintech company JPYC, which became the first of its kind in the country.
The nation’s leading banks, including Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corporation, and Mizuho Bank, have also started pilot projects to test the use of stablecoins and tokenized deposits.