JPYC Launches as Japan's First Regulated Yen Stablecoin, Targeting $6.8 Billion Issuance Across Major Blockchains

JPYC, Japan's pioneering regulated yen-backed stablecoin, is set to launch on the Avalanche, Ethereum, and Polygon blockchains. This significant development, announced by Avalanche, aims to streamline the conversion of Japanese Yen into on-chain digital assets. The move positions JPYC as a crucial bridge between traditional finance and the burgeoning decentralized economy, aligning with Japan's advanced regulatory framework for digital currencies.

The launch follows JPYC's recent receipt of Japan's first funds transfer service provider license, granted by the Financial Services Agency (FSA) under the revised Payment Services Act of 2023. This regulatory clarity distinguishes JPYC as the nation's first legally approved yen stablecoin, ensuring stringent oversight and stability. The framework requires 100% reserve backing, primarily by domestic savings and Japanese government bonds (JGBs).

JPYC will facilitate issuance and redemption services, allowing users to convert yen to on-chain assets seamlessly. The company's business model forgoes transaction fees, instead generating revenue from interest earned on its JGB holdings, a strategy mirroring major U.S. stablecoin issuers. As stated in the tweet by Avalanche, the integration ">facilitating issuance and redemption services that allow users to convert yen to on-chain assets."

CEO Noritaka Okabe stated that initial demand is anticipated from institutional investors, hedge funds, and family offices in Japan, with a long-term vision for international adoption as a "digital yen." JPYC aims to issue ¥1 trillion (approximately $6.8 billion) in tokens by 2028. This expansion could significantly boost demand for Japanese government bonds, as JPYC's reserves will include a substantial amount of JGBs, potentially influencing Japan's bond market dynamics.

The choice of Avalanche, Ethereum, and Polygon for deployment underscores JPYC's ambition for broad interoperability within the global blockchain ecosystem. Avalanche highlighted its role in this transition, noting it is ">where capital connects innovation with global finance." This multi-chain approach is expected to enhance the stablecoin's utility for cross-border payments, remittances, and decentralized finance applications.