Japan’s First Approved Stablecoin is Invested by Circle

Japan’s Financial Services Agency will approve the nation’s first yen-denominated stablecoin. This approval allows fintech firm JPYC Inc. to issue its digital token. The company plans to launch the stablecoin later this year.

According to a Nikkei report published on August 18, the regulator plans to register JPYC as a money transfer service provider within the month, with the token’s distribution to begin shortly thereafter. The initiative marks a milestone in Japan’s push to modernize its financial system, introducing a stablecoin designed to function as a digital representation of the yen while adhering to strict domestic regulations.

A Digital Yen Alternative in the Payment Landscape

The stablecoin’s issuer, JPYC Inc., was established in 2019. It is a fintech company based in Tokyo, Japan. The firm specializes in blockchain technology and digital assets, focusing on stablecoins pegged to the Japanese yen.

In 2021, Circle, the issuer of USDC stablecoin, invested in JPYC through Circle Ventures. JPYC raised approximately 500 million yen in Series A funding. JPYC’s yen-pegged stablecoin operates as a prepaid payment instrument, enabling 1:1 yen accounting treatment.

In response to BeInCrypto’s request for comment, JPYC’s CEO, Norikata Okabe, posted on X confirming the investment, including Circle’s.

“JPYC receives investments directly or through CVC from listed companies such as Circle, Asteria, Densan System, Persol, Aiful, and others. In addition, there are listed companies that have invested in JPYC on a non-disclosure basis. Furthermore, we have commissioned Simplex to develop our trading system.”

The stablecoin, branded as JPYC, is available as an ERC-20 token on Ethereum as well as other blockchains like Polygon and Shiden. The stablecoin maintains parity with the Japanese yen. JPYC backs its issuance with bank deposits and government bonds. These liquid assets provide safeguards that ensure price stability.

In practical use, consumers can apply for the token by transferring funds, after which the equivalent amount of JPYC will be credited to their digital wallets. This structure mirrors the operational frameworks already common in dollar-denominated stablecoins, which have grown into a global market worth more than $285 billion.

Regulatory Oversight and Market Integrity

The FSA views this approval as more than a regulatory formality. The stablecoin aims to foster a safe domestic ecosystem. It could support cashless transactions and international remittances. The system also enables corporate payments.

A yen-pegged stablecoin offers individuals a new digital payment method. Companies can reduce foreign exchange costs in cross-border trade. The stablecoin presents opportunities for both groups.

Despite its promise, stablecoins continue to raise concerns over money laundering, illicit transfers, and systemic risk. The FSA has emphasized that JPYC’s operations will fall under the framework of Japan’s Payment Services Act, with enhanced monitoring and compliance obligations.

JPYC Inc. has pledged to prioritize regulatory adherence. In July, Okabe spoke at the IVC Summit 2025. He stated that JPYC was preparing a “new version.” The update reflects evolving regulatory and market demands.

Competitive Pressures and Strategic Outlook

Japanese market already features exposure to U.S. dollar-backed stablecoins, most notably through SBI VC Trade’s handling of USDC. However, JPYC’s approval as the first yen-based token introduces a new market dimension. Its success will depend on whether it can achieve widespread adoption in a field dominated by dollar-linked instruments.

Looking ahead, yen stablecoins could intersect with broader financial innovations. Potential applications range from e-commerce platforms to digital securities markets. The stablecoin could integrate with these systems easily. It might also bridge with a possible central bank digital currency. If yen-pegged tokens gain traction, they could accelerate the digitalization of Japan’s payment infrastructure, reshaping consumer behavior and corporate finance.