Japan has emerged as a key Asian testing ground for regulated stablecoins, as foreign issuers such as Circle and Ripple jostle for roles alongside domestic firms including JPYC and the country's megabanks.
Foreign, Domestic Issuers Jostle for Early Lead in Japan Stablecoin Market
6 July 2026 - 01:02 CEST
Payment law update
Tokyo has pushed towards a cashless economy since 2019, when the government introduced a rewards programme to lift digital payments in one of the world's most cash-reliant advanced economies.
Japan overhauled the Payment Services Act in June 2023 to create a regime for yen-pegged stablecoins – digital tokens tied to the value of the yen. The reforms recognised stablecoins as electronic payment instruments and permitted three types of licensed domestic entities – banks, trust companies and fund-transfer service providers – to issue and distribute them in one of Asia's most important economies, with GDP of around $4tn.
Further amendments that took effect on 1 Jun opened the framework to foreign-issued stablecoins, mostly dollar-denominated, distributed through licensed Japanese intermediaries.
At the centre of the stablecoin planning is Japan's Financial Services Agency (FSA), which is defining the rules and backing pilot efforts with major banks and licensed issuers. According to Bank of Japan flow-of-funds data, Japanese households held 2,286tn yen ($15tn) in financial assets at end-September 2025, the world's third-largest pool of household savings, behind only the US and China. That gives Tokyo scope to grow regulated stablecoin use as the shift away from cash accelerates.
Two paths in Japan
The global stablecoin sector's total market value rose from $307bn at the start of January to more than $312bn by the end of June, according to CoinMarketCap, as adoption gathered pace in payments and settlement.
Japan ranks 19th globally in Chainalysis' 2025 crypto adoption index, suggesting room for growth in usage that Tokyo's larger digital-asset strategy aims to capture through modernised payments, cross-border settlement and regulated onchain finance infrastructure.
The market is splitting into two models, with foreign stablecoin issuers teaming up with local partners to build cross-border settlement rails and Japanese financial institutions building local yen-denominated infrastructure for domestic and corporate use.
Nomura ties deepen
Second-largest stablecoin issuer Circle, creator of USD Coin (USDC), deepened its footprint in Japan on 26 Jun with a partnership with Nomura Holdings, the country's largest securities firm by retail client assets.
The two plan to explore onchain finance collaborations in Japan and globally, including instant settlement using stablecoins, collateral management, fund transfers and capital markets transactions. They also aim to establish trust functions needed for stablecoin circulation, such as asset preservation.
Circle entered Japan in March 2025, becoming the first foreign stablecoin issuer to secure approval for USDC use through SBI VC Trade.
SBI's dual partnerships
Ripple's dollar-pegged stablecoin RLUSD followed on the same platform in June. SBI VC Trade on 24 Jun listed the stablecoin and began offering the SBI Group's newly issued yen stablecoin JPYSC, jointly developed with Singapore-based Startale Group, the Web3 infrastructure firm founded by Astar Network's Sota Watanabe. RLUSD and JPYSC are the first products under two new categories established by Japan's revised Payment Services Act.
Tokyo-based financial conglomerate SBI Holdings is the common denominator for the two foreign issuers, Circle and Ripple. Both distribute their stablecoins through SBI's crypto exchange arm SBI VC Trade: the group expands USDC reach on one side and deepens infrastructure ties with Ripple on the other.
Circle's JPYC stake
Circle has another local edge, having entered a capital alliance with JPYC in November 2021 when the token operated as a prepaid payment instrument. JPYC became Japan's first FSA-licensed yen stablecoin in October 2025, backed 1:1 by yen reserves including bank deposits and Japanese government bonds, and joined Circle's stablecoin ecosystem as the yen-denominated partner.
JPYC's market capitalisation stood at around $282k as of 3 Jul, according to CoinMarketCap. Its earlier prepaid version, which still circulates separately, had a market capitalisation of around $16mn on the same date.
Japan's megabanks
Meanwhile, Japan's three megabanks, MUFG, SMBC and Mizuho, which together manage more than $7tn in assets – are working on a jointly issued, corporate-use stablecoin, with a yen token first and possible dollar-denominated use later, according to the banks' 10 Jun joint statement. Known as Project Pax, the consortium targets 1tn yen ($6.5bn) in B2B settlement volume by 2028, with commercial rollout during fiscal 2026.
The stablecoin is aimed at business settlements, including trading and intra-company payments, through a framework built with Japanese tokenization and stablecoin infrastructure provider Progmat and under the FSA pilot.
Incumbents under pressure
Market leader Tether (USDT), with about $184bn in global circulation as of 3 Jul, is present in Japan only in a limited, indirect capacity and is not a dominant regulated issuer.
Tether also faces recent challenges to its market position. More than 140 companies, spanning payment networks, banks, crypto firms and technology platforms, have signed on to back a new US dollar-pegged stablecoin called Open USD, operated by Open Standard, a new independent company governed by a board drawn from its consortium partners.
Backing the project, which challenges the incumbent single-issuer model, are some of the biggest names in finance, including Visa, Stripe, Mastercard, BlackRock, BNY – the custody bank formerly known as Bank of New York Mellon – Coinbase, Solana, Ripple, Google and Shopify.
