Japan is inching towards the approval of its first yen-backed stablecoin, with regulators likely to approve it as soon as October.
The Financial Services Agency will approve the issuance of Japan’s first yen-denominated stablecoin as early as autumn, with the aim of using it for international remittances and more.
The tokens might be utilized for cross-border remittances, corporate payments abroad, or trading in decentralized finance markets.
Market observers think that JPYC can also find use in carry trades, which exploit the disparity in interest rates among currencies.
That prospect has attracted institutional interest at a point when stablecoins are becoming popular worldwide.
Dollar-backed tokens continue to hold sway, with the overall value of all stablecoins recently hitting more than $250 billion.
Yet, Japan’s attempt to launch a regulated yen-backed token may signal the way toward increased regional adoption in Asia, where dollar-denominated stablecoin alternatives are being monitored closely.
JPYC’s approval would highlight Japan’s stricter but clearer approach compared to many other countries.
Analysts say the framework gives companies more certainty as they test blockchain-based settlement systems without fear of regulatory ambiguity.
According to estimates, the global stablecoin market could swell to nearly $4 trillion by 2030, more than 10 times its current size.
And if yen-pegged instruments, such as JPYC, gain traction, they could capture some of that growth and resonate with Asian investors looking for alternatives to dollars.
The Japanese move also comes as governments across the globe heighten their monitoring of stablecoins due to fears about financial stability.
Featured image from CNN, chart from TradingView
