The post Japan’s megabanks and fintechs race to issue regulated yen-pegged stablecoins appeared on BitcoinEthereumNews.com.

The stablecoin competition is heating up in Japan as the nation’s three megabanks, Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho announced plans to issue a common-standard yen and dollar-pegged stablecoin for corporate payments. The group, which collectively serves more than 300,000 major clients, aims to roll out tokens within this fiscal year after conducting trial transfers within the Mitsubishi Corporation, which operates some 240 companies under its umbrella. Japan overhauled its Payment Services Act (PSA) in 2023 to permit only licensed banks, trust companies, and registered funds-transfer businesses to issue stablecoins, creating one of the world’s strictest frameworks. JPYC wins Japan’s first stablecoin license The amendment effectively froze the market for two years until fintech startup JPYC broke through on August 18, becoming the first to be granted a Funds Transfer Service Provider (FTSP) license and the country’s first issuer of a yen-denominated stablecoin. The fintech startup met the legal requirements to ensure the tokens are redeemable 1:1 for Japanese yen and are backed by secure assets, primarily bank deposits and government bonds. The startup’s success as Japan’s official stablecoin issuer defied assumptions that only major banks would secure approval. JPYC CEO Noritaka Okabe said the licensing framework was never designed with startups in mind. The application process, he said, is so demanding that even banks undergo scrutiny equivalent to founding a new financial institution. For most startups, he added, the smarter strategy is to leverage stablecoins within existing operations rather than seeking to issue them independently. Japan relaxes collateral rules ​​Crucially, a 2025 amendment to the PSA relaxed reserve rules, allowing issuers to hold up to 50% of backing assets in low-risk instruments like short-term government bonds and fixed-term deposits, moving past the prior demand-deposit mandate. The revision is designed to make stablecoin issuance commercially sustainable without compromising liquidity safeguards.…

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Filed under: News - @ October 17, 2025 3:28 pm