Japanese fintech firm JPYC is poised to gain regulatory approval from the Financial Services Agency (FSA) later this year for its yen-backed stablecoin, marking a significant milestone in Japan’s financial landscape.

The launch of JPYC will offer retail and institutional users broader access, aligning with the firm’s plans to register as a money transfer business. The company aims to issue an amount equivalent to nearly USD 7 billion over the next three years, according to reports by Nikkei.

Unlike earlier dollar-pegged projects, JPYC will be the first officially recognized yen-backed stablecoin in Japan, setting it apart as a regulated financial instrument. Its primary use case is for payments, including cross-border transactions, rather than speculative trading.

Regulatory Landscape and Global Trends

On the global stage, stablecoins have experienced substantial growth, with a market capitalization estimated at around USD 250 billion as reported by Decrypt. This development has compelled various jurisdictions to establish new regulatory frameworks.

In Japan, legislation related to stablecoins came into effect in June 2023 under the Payment Services Act, with subsequent amendments expanding the regulatory framework in March of the same year. Adoption has been cautious, and earlier this year, Circle collaborated with local exchange SBI Holdings to launch the first regulated dollar-pegged stablecoin.

By pursuing official recognition, JPYC intends to integrate seamlessly into Japan’s financial ecosystem while emphasizing its function as a currency-denominated digital asset rather than a cryptocurrency. This approach underscores its utility as an electronic payment instrument whose value is directly tied to the yen.