Japan Approves JPYC JPY Stablecoin on ETH, Avax & Polygon
Japan’s Financial Services Agency (FSA) has approved the issuance of JPYC, Japan’s first compliant JPY stablecoin. The stablecoin will launch this autumn on Ethereum (ERC-20), Avalanche and Polygon networks. Under the revised Fund Settlement Act, stablecoins are classified as electronic payment instruments. Issuers must be licensed banks, trust companies or fund transfer operators, and reserves must be held in liquid JPY deposits or Japanese government bonds. This regulatory framework lowers credit risk and raises entry barriers. JPYC aims to support cross-border remittances, B2B payments and deeper integration with DeFi and NFT marketplaces. For institutions, the JPY stablecoin could boost demand for Japanese government bonds. For traders, a home-grown JPY stablecoin offers an alternative to USD stablecoins, enhancing on-chain liquidity and digital asset diversification. Market acceptance and security resilience will be key indicators to watch.
Bullish
The approval of JPYC as Japan’s first compliant JPY stablecoin is a bullish development. It adds a new on-chain liquidity source and reduces dependence on USD stablecoins. Regulatory clarity from the Fund Settlement Act lowers risk and encourages institutional participation in Japanese government bonds. Traders can diversify with a native JPY stablecoin across Ethereum, Avalanche (Avax) and Polygon networks, likely boosting trading volumes and DeFi activity. Historical parallels with regulated stablecoins like USDC show that clear frameworks drive adoption and on-chain usage. In the short term, expect higher demand for ETH, AVAX and MATIC liquidity pools. Long term, JPYC could strengthen JPY’s role in digital finance and reshape stablecoin market share.