JPY Stablecoins are a class of cryptocurrency designed to maintain a stable value pegged 1:1 to the Japanese Yen (JPY). They seek to merge the stability of a major fiat currency with the technological advantages of digital assets, including fast, low-cost, and transparent global transactions. The evolution of JPY stablecoins is heavily shaped by Japan's proactive regulatory measures, particularly the revised Payment Services Act, which established a formal legal framework for their issuance and circulation.

Overview

JPY stablecoins serve as a crucial bridge between Japan's traditional financial system and the burgeoning digital asset economy. Their primary function is to provide a reliable, yen-denominated unit of account on public blockchains, facilitating activities in decentralized finance (DeFi), cross-border commerce, and institutional settlement. The market consists of several distinct models. Early entrants like JPYC operate under a classification as a Prepaid Payment Instrument, akin to electronic money. In contrast, GYEN gained its footing as the first regulated JPY stablecoin chartered outside of Japan, under the supervision of the New York State Department of Financial Services (NYDFS). ^{[1] [2]}​

A pivotal moment for the sector was the implementation of Japan's revised Payment Services Act in June 2023. This legislation created one of the world's first comprehensive legal frameworks for stablecoins, defining them as "Electronic Payment Instruments" and specifying that only licensed banks, trust companies, and registered money transfer agents can issue them domestically. ^{[3] [2]}​

This regulatory clarity has spurred Japan's largest financial institutions to enter the space. Major players including Mitsubishi UFJ Financial Group (MUFG), Nomura Holdings, and GMO Internet Group have initiated projects to issue yen-pegged stablecoins under the new law. These initiatives, such as the Progmat Coin platform and the Nomura-GMO partnership, signal a significant shift towards bank-issued, fully compliant stablecoins intended for both domestic and global use. ^{[3] [2]}​

Regulatory Landscape in Japan

Japan has positioned itself as a global leader in stablecoin regulation by establishing a clear and comprehensive legal framework. The country's approach distinguishes between different types of instruments based on their structure and issuer.

Revised Payment Services Act (2023)

The amended Payment Services Act (PSA), which became effective on June 1, 2023, is the cornerstone of Japan's stablecoin regulation. It provides a formal legal definition and a clear set of rules for the issuance and circulation of what it terms "Electronic Payment Instruments." ^{[3] [2]}

Key provisions of the act include:

• Legal Definition: Stablecoins are legally defined as "Electronic Payment Instruments."
• Pegging Requirement: They must be pegged to a legal tender, such as the Japanese Yen, and the issuer must guarantee redemption to the holder at face value.
• Permitted Issuers: The law restricts issuance within Japan to three categories of licensed entities:
  1. Licensed Banks
  2. Registered Money Transfer Agents
  3. Trust Companies
• Significance: This framework provides legal certainty, enhances user protection, and has been instrumental in encouraging large traditional financial institutions to develop and issue their own stablecoins. The projects initiated by Nomura, GMO, and MUFG are direct consequences of this regulatory development. ^{[3] [2]}

Prepaid Payment Instruments (PPI)

Before the 2023 revision of the PSA, some JPY-pegged tokens operated under a different legal classification known as a Prepaid Payment Instrument (PPI). This model treats the token as a form of prepaid electronic money or a digital voucher, similar to a gift card. JPYC was a notable example that utilized this framework, allowing it to launch and operate in the market before the comprehensive stablecoin law was enacted. This classification subjects the issuer to different, and in some respects less stringent, requirements than those for licensed banks or trust companies under the newer "Electronic Payment Instrument" regime. ^{[3] [2]}

Major JPY Stablecoins

The JPY stablecoin market is characterized by a few key players, each operating under a different regulatory and structural model.

JPYC (JPY Coin)

• Issuer: JPYC Inc. (founded in November 2019) ^[2]
• Launch Date: January 2021 ^[2]
• Regulatory Classification: JPYC is classified as a Prepaid Payment Instrument under the Japanese Payment Services Act. This distinguishes it from stablecoins issued as "Electronic Payment Instruments" under the 2023 legal framework. As such, it functions similarly to electronic money or a prepaid voucher. ^{[3] [4] [2]}
• Mechanism: Users purchase JPYC at a 1:1 ratio via a Japanese bank transfer. The equivalent amount of Japanese Yen is held as collateral in a trust account to fully back the issued tokens. ^[3]
• Technology: JPYC is a multi-chain token, making it accessible across numerous blockchain ecosystems. It is available on networks including Ethereum, Polygon, Avalanche, Astar, Shiden, and Gnosis. ^{[3] [2]}
• Market Position: As the first JPY-pegged stablecoin issued in Japan, JPYC gained early traction and is described by its issuer as the most well-known yen stablecoin in the country. It is widely used within Japan's domestic Web3 and DeFi communities for on-chain transactions, NFT purchases, and community payments. ^{[4] [2]}

GYEN (GMO Japanese YEN)

• Issuer: GMO-Z.com Trust Company, Inc., a U.S.-based subsidiary of the Japanese technology conglomerate GMO Internet Group. ^{[1] [3]}
• Regulatory Classification: GYEN is distinguished as the world's first regulated JPY-pegged stablecoin. It is issued by a limited purpose trust company chartered and regulated by the New York State Department of Financial Services (NYDFS). It operates under U.S. regulations and is not governed by Japan's 2023 Payment Services Act. ^{[1] [3]} Under the European Union's Markets in Crypto-Assets (MiCA) regulation, GYEN is classified as an "e-money token," but its offering and trading are restricted in the EU as its issuer is not authorized there. ^[1]
• Mechanism: Every GYEN is 100% backed by Japanese Yen held in reserve. These reserves are subject to monthly attestations conducted by an independent accounting firm to ensure full collateralization, with reports published publicly. The issuer, adhering to high security standards, is also ISO 27001 certified. ^{[1] [2]}
• Technology: GYEN is available on multiple public blockchains to support a variety of use cases. Supported networks include Ethereum, Solana, and Stellar. ^{[1] [2]}
• Ecosystem and Partnerships: GYEN has integrated with a wide network of global partners. This includes centralized exchanges like Bitstamp, decentralized protocols like Uniswap and Curve.fi, settlement service providers such as Fireblocks and BitGo, and custody solutions from Anchorage Digital, Hex Trust, and KOMAINU. ^[1]

Convertible JPY Token (CJPY)

• Issuer: Issued by licensed Japanese financial institutions utilizing the Progmat Coin platform.
• Regulatory Classification: Designed to be an "Electronic Payment Instrument" fully compliant with Japan's revised Payment Services Act.
• Mechanism: A fiat-collateralized stablecoin, with each token fully backed by a Japanese Yen deposit held in a trust account with the issuing bank.
• Technology: Built on the Progmat Coin platform, which is a multi-chain infrastructure supporting networks like Ethereum, Polygon, and Avalanche.
• Market Position: CJPY is primarily aimed at the business-to-business (B2B) sector for use cases such as corporate settlements, trade finance, and transactions involving tokenized securities on the Progmat platform.

Celo Japanese Yen (cJPY)

• Issuer: Issued through the Mento Protocol on the Celo blockchain. It is a decentralized stablecoin, part of the Celo ecosystem, rather than being issued by a single corporate entity.
• Regulatory Classification: An algorithmic stablecoin. Its structure is distinct from fiat-backed stablecoins regulated under Japan's Payment Services Act.
• Mechanism: cJPY maintains its peg to the Yen through an algorithmic mechanism managed by the Mento Protocol. It is backed by a diversified reserve of crypto-assets, including Celo's native asset (CELO), and stability is maintained through an arbitrage system that allows users to mint or burn cJPY in exchange for a target value of reserve assets.
• Technology: A native token on the Celo blockchain, an EVM-compatible Proof-of-Stake network designed for mobile-first financial applications.
• Market Position: Integrated within the Celo DeFi ecosystem, cJPY is intended for low-cost payments, remittances, and decentralized finance applications on the network.

Dephaser-JPY (D¥)

• Issuer: Dephaser, a decentralized finance (DeFi) protocol on the Astar Network.
• Regulatory Classification: As a synthetic, crypto-collateralized asset generated within a DeFi protocol, D¥ is not regulated under Japan's formal stablecoin framework for "Electronic Payment Instruments."
• Mechanism: D¥ is a synthetic stablecoin minted by users on the Dephaser platform. Users generate D¥ by depositing other crypto-assets (such as ASTR) as collateral into a smart contract. The system is designed to be over-collateralized to absorb the price volatility of the underlying collateral.
• Technology: Issued as a token on the Astar Network, a Polkadot parachain that supports both EVM and WebAssembly smart contracts.
• Market Position: D¥'s primary use case is within the Astar and Polkadot DeFi ecosystems. It can be used for trading, liquidity provision, and borrowing/lending within dApps that support it.

Institutional Adoption and Projects

The establishment of a clear legal framework in Japan has catalyzed the entry of major domestic financial institutions into the stablecoin market.

Nomura-GMO Partnership

On May 27, 2024, Nomura Holdings, its digital asset subsidiary Laser Digital, and GMO Internet Group announced a collaboration to explore the issuance of stablecoins in Japan. ^[3]

• Project Goal: The primary objective of the partnership is to issue, redeem, and circulate JPY and USD-pegged stablecoins that are fully compliant with Japan's 2023 Payment Services Act. ^[3]
• Launch: The partnership's first yen-pegged stablecoin reportedly debuted in Japan on October 27, 2025. ^[3]
• Significance: This initiative represents the entry of one of Japan's largest investment banks, Nomura, into the domestic stablecoin market. It combines Nomura's institutional client base and financial expertise with GMO's established technology and experience in issuing the GYEN stablecoin. ^[3]
• Stablecoin-as-a-Service: A key component of the project is the development of a "Stablecoin-as-a-Service" platform. This solution is designed to enable other companies to issue their own branded stablecoins by providing the necessary infrastructure for regulatory compliance, blockchain integration, and backend transaction management. ^[3]

Progmat Coin Platform

The Progmat Coin platform is a stablecoin-as-a-service infrastructure project developed to enable licensed institutions to issue branded stablecoins compliant with Japanese law.

• Developers: The platform is led by Progmat, Inc., a joint venture with significant backing from Mitsubishi UFJ Trust and Banking Corporation (MUTB). ^[2]
• Major Adopters:
  • Mitsubishi UFJ Financial Group (MUFG): In October 2023, Japan's largest banking group announced its intention to use the Progmat Coin platform to issue stablecoins on public blockchains. ^[2]
  • Nomura Holdings: As part of its broader stablecoin strategy, Nomura and Laser Digital also partnered with Progmat in May 2024 to utilize the platform for its stablecoin issuance business. ^[2]
• Technology: The platform is designed to be multi-chain, with announced support for prominent public blockchains including Ethereum, Polygon, and Avalanche. ^[2]

Use Cases and Market Potential

JPY stablecoins are positioned to support a diverse range of applications across both traditional and digital finance.

• Corporate and Institutional Finance: Enabling faster and more cost-effective settlement for business-to-business (B2B) transactions, securities trading, and supply chain finance. ^[3]
• Cross-Border Commerce: Facilitating low-cost international payments and remittances by reducing reliance on traditional banking intermediaries and correspondent networks. ^[3]
• Web3 and DeFi: Providing a stable, yen-denominated unit of account for decentralized finance protocols, NFT marketplaces, and play-to-earn (P2E) gaming ecosystems, particularly within Japan's active Web3 community. ^{[4] [3]}
• Programmable Money: Automating complex payment flows, such as recurring invoices, royalty distributions, and smart contract-based executions. ^[3]
• Retail Payments: Holding potential for future use in everyday digital payments as adoption and infrastructure mature. ^[3]