JPYC Inc. officially launches its yen-pegged stablecoin, JPYC. It is backed by bank deposits and bonds for digital payments.
JPYC Inc. announced the official launch of its new stablecoin. The stablecoin, named JPYC, is denominated in Japanese yen. In addition to this, the company issued its own dedicated platform, JPYC EX. The platform can handle both issuance and redemption. The move makes the world’s first stablecoin that is pegged to yen.
Yen-Pegged Asset Backed by Deposits and Government Bonds
The stablecoin is pegged 1:1 to the yen. Importantly, it is totally supported by bank deposits. In addition to this, Japanese government bonds are also supportive. This also guarantees full convertibility into the yen. Initial offering is now supported on three blockchains. These are Avalanche, Ethereum, and Polygon.
The launch comes after a worldwide trend of stablecoin adoption. As such, the market is currently dominated by the dollar-backed stablecoins. They represent more than 99% of world production. Japanese law passed stablecoin issuance regulations in 2023. South Korea has also committed to won-pegged stablecoins. Digital currency acceptance is increasing worldwide.
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Also, U.S. President Trump is a strong supporter of the crypto industry. Besides, China is now considering yuan-backed stablecoins. Three megabanks in Japan can co-issue stablecoins in the near future. This move can bring digital assets into the mainstream. Thus, the launch comes at a critical time. National stablecoin projects are favoured by the environment.
However, policymakers are still worried about stablecoins. There is an apprehension of funds flow outside the regulated banks. BOJ Deputy Governor Ryozo Himino remarked. He said that stablecoins could partially replace bank deposits. This indicates that a potentially major redesign of the financial system could happen. Therefore, regulatory oversight is also high in the world.
JPYC EX Stablecoin Launch Strengthens Japan’s Web3 Ambitions
Dedicated issuance platform operation to JPYC EX. This platform simplifies the process for both users and institutions. Furthermore, it guarantees smooth redemption to yen. The Japanese startup company will be free of transaction fees at first. This strategy is entirely based on the rapid growth of usage. Hence, they are more concerned with volume than with immediate revenue.
The new business model of the firm is to generate revenue differently. They will reap the benefits of the interest on the JGB holdings. Using this innovative model, the amount of friction is reduced to a very low degree. On the other hand, Japan has a huge change in payment habits. The proportion of cashless payments increased to 42.8% in 2024. This is up from 13.2% in 2010.
However, there may be differences in the speed of adoption of yen stablecoins. Former BOJ executive Tomoyuki Shimoda warned. He said yen stablecoins will take time to gain popularity. This is unlike the massive use of dollar-backed ones. Thus, trust and utility has to be built now. The Japanese continue to have a liking for physical cash.
The establishment of JPYC is an important first step. It is a digital alternative to cash delivered instantly. Further, it makes Japan a leader in stablecoin regulation. The platform provides the necessary infrastructure for the adoption of Web3. Consequently, now, the firm focuses on international competition. This move is of strategic importance to Asia.
Ultimately, JPYC needs to demonstrate its utility all the time. It should also be easily compatible with merchant systems across the country. Moreover, the next step is to have general development support. The platform has the potential to speed the Japanese cashless transition. Hence, its success will be closely observed at this time. This is a significant sign for other national stablecoins.
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