SBI Holdings, a partner of Ripple, has expanded its stablecoin strategy by directing a portion of the reserves backing its yen-pegged stablecoin, JPYSC, into short-term Japanese government bonds. The investment is being executed through SBI Shinsei Trust Bank and SBI VC Trade.
The JPYSC stablecoin is the first trust-based yen stablecoin in Japan to adopt the country's new reserve regulations following the revision of the Payment Services Act, which went into effect on June 1, 2026. The revised framework permits eligible trust-backed stablecoins to maintain up to 50 percent of their tokens in short-term government bonds or short-term time deposits, provided they meet specific regulatory requirements.
SBI Shinsei Trust Bank has allocated 1 billion yen of JPYSC's backing assets into short-term Japanese government bonds. As of September 7, JPYSC has a supply worth approximately 20.1 billion yen, while applications for SBI VC Trade's yen lending service have reached about 6.9 billion yen, bringing the combined total outstanding balance of the ecosystem close to 27 billion yen.
The move by SBI follows recent indications of softer demand in Japan's government bond market. For instance, the auction for the Japanese government's five-year bond on June 22 saw a decline in investor interest, with the bid-to-cover ratio dropping to 3.11 compared to 3.22 in the previous year and a 12-month average of 3.47.
At the same time, the Japanese yen has experienced fluctuations, staying above 160 to the U.S. dollar and raising concerns regarding imported inflation due to the country's heavy reliance on energy and food imports. These pressures have contributed to expectations that the Bank of Japan could face pressure to raise interest rates, which typically lead to higher yields and lower bond values.
SBI stated that holding short-term government securities is part of its reserve management policy for JPYSC, designed to maintain liquidity in the redemption market and invest the reserve pool in high-rated yen-denominated assets. Looking ahead, SBI anticipates that JPYSC could see future use cases extending beyond bond purchases, including payments, on-chain foreign exchange transactions, and the settlement of tokenized real-world assets.
