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Japan joins worldwide stablecoin revolution, amid concerns, high cash usage
Japan has unveiled the JPYC stablecoin amid growing global interest in stablecoins; however, some concerns remain such as high cash usage in Japan and potential risks.
October 28, 2025 by Bradley Cooper — Editor, ATM Marketplace & Food Truck Operator
In the latest move for stablecoins, Japan unveiled the JPYC stablecoin, backed by the yen. It was launched by startup JPYC, with backing from domestic savings and Japanese government bonds, according to a report by Reuters.
The company was first launched in 2021 by CEO Noritaka Okabe, who aimed "to create a digital currency that will respond to the rapid digitization of society," according to the company's website. Its goal is to issue $66 billion over the next three years, and will not charge any transaction fees initially. It instead plans to earn money from interest on bonds.
"We hope to spur innovation by giving startups access to low transaction and settlement fees," Okabe said in a press briefing.
In addition to JPYC, Japan's three largest banks Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group will work together to jointly issue stablecoins.
However, Japan will likely take longer to adopt stablecoins in any large numbers, as cash is the most common payment method in Japan. In fact, cashless payments like credit cards, mobile payments and others only make up 42.8% of all transactions in Japan, according to data from statista, with cash taking up the rest.
Japan Times adds that this is far less than other East Asian countries, such as China, where 83.5% of payments are cashless. As a result of this trend, experts expect it will take a while for stablecoins to catch on.
"There's a lot of uncertainty on whether yen stablecoins will become widespread in Japan," Tomoyuki Shimoda, former executive at Bank of Japan, said in the Reuters report. "If megabanks join the market, the pace could accelerate. But it could still take at least two to three years."
Stablecoins have received worldwide attention in recent months, driven in large part due to the Trump's administrations embrace of stablecoins via the GENIUS Act. This Act was signed in July to significant bipartisan support with 18 Democrat senators and 102 Democrat representatives joining 206 Republican Representatives and 50 Republican Senators to pass it. It stipulates that permitted issuers must follow the Bank Secrecy Act and that they, "must maintain reserves backing the stablecoin on a one-to-one basis using U.S. currency or other similarly liquid assets, as specified. Permitted issuers must also publicly disclose their redemption policy and publish monthly the details of their reserves."
In the U.S., several companies and even a state has jumped on this stablecoin trend, as the Bank of North Dakota, the only state-owned bank in the U.S., partnered with Fiserv to create the Roughrider Coin, named after Theodore Roosevelt's famed cavalry unit in the Spanish American War.
Other countries have followed suit, as Kazakhstan, a major crypto hub, unveiled the Evo stablecoin via Solana, Mastercard. In the EU, a consortium of nine banks including UniCredit, ING, Banca Sella, KBC, Dankse Bank, Dekabank, SEB, CaixaBank and Raiffeisen plan to unveil a euro backed stablecoin by the second half of 2026. The central Bank of England, previously anti stablecoin, has softened its stance, with Governor Andrew Bailey stating that stablecoins should be regulated like money and it would be, "wrong to be against stablecoins as matter of principle."
There has been some pushback against this wave of stablecoins. For example, the Bank for International Settlements, based in Switzerland has questioned the soundness of stablecoins especially since they trade at different exchange rates.
"Stablecoins as a form of sound money fall short, and without regulation pose a risk to financial stability and monetary sovereignty," BIS said.
The bank mainly argues that central banks should create one unified ledger rather than having disparate stablecoins.
Other banks have pointed to the risk of people taking money out of their bank accounts and placing it in risky crypto exchanges, as many of them offer rewards for stablecoins, such as Coinbase which provides a 4.1% annual reward for USDC, according to a report by Wired. This could cause both major security issues due to a hack or loss of funds if the exchange goes under. In addition, stablecoins are not insured by the FDIC, which could cause major losses in the event of a collapse.
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