Japan approves the first yen stablecoin! The rise of fiat-backed stablecoins globally, is SWIFT getting worried?

In the wave of global digital assets, a sector long dominated by USD stablecoins (such as USDT and USDC) is undergoing a structural transformation. It is reported that Japan's Financial Services Agency (FSA) is expected to officially approve the issuance of its first digital currency pegged to its national legal tender — the yen stablecoin JPYC — as early as this fall.

This is not only a key step taken by Japan in the field of digital finance, but also a strong signal that a diversified global stablecoin era supported by multiple sovereign fiat currencies is accelerating its arrival. From Tokyo to Hong Kong, and then to Seoul, major financial centers in Asia are collectively awakening, paving the way for the "digital avatars" of their national currencies.

This wave, personally guided by regulatory agencies from various countries, may aim not only to reshape domestic payments but also to target the current global cross-border payment giant—the SWIFT system. A more efficient and lower-cost global financial infrastructure is rising. Should SWIFT really be worried?

Yen stablecoin

The first to grab the opportunity is JPYC Inc., a fintech company based in Tokyo. According to the plan, the company will complete the registration process for "money transfer operators" within this month and will lead the launch of the first fully compliant Japanese yen stablecoin.

JPYC will strictly maintain a fixed value of "1 yen = 1 JPYC". The confidence behind this is the fully transparent and strictly regulated reserve assets. Similar to mainstream dollar stablecoins, the reserves of JPYC will consist of high liquidity quality assets, mainly including bank deposits and Japanese government bonds (JGBs). This means that every JPYC in circulation in the market is backed by an equivalent real yen asset.

The approval of JPYC perfectly reflects Japan's cautious approach of "regulating first, then developing" in financial innovation. In May 2023, Japan officially revised the "Payment Services Act," incorporating stablecoins into payment tools for the first time, and clearly stipulating that the issuing entities are limited to banks, trust companies, and licensed fund transfer businesses. This approach is fundamentally different from the "develop first, then govern" model adopted by some countries, as it prioritizes consumer protection and the stability of the financial system, laying a solid legal foundation for the healthy development of the market.

For a long time, even in the Japanese market, the circulating stablecoins were mainly offshore US dollars. The emergence of JPYC will historically break this situation and provide Japanese businesses and individuals with a more trustworthy digital payment and settlement tool based on their national currency. This is of great significance for consolidating Japan's financial autonomy in the global digital economy.

It is worth noting that the influence of JPYC extends far beyond the payment sector. Its issuing company representative, Noritaka Okabe, keenly pointed out that the rise of the yen stablecoin could even bring profound changes to Japan's massive national debt market. The logic chain is very clear: the expansion of stablecoin issuance means a simultaneous increase in the reserve asset pool behind it. Since JPYC regards Japanese government bonds as one of its core reserve assets, the larger its issuance, the stronger the demand for Japanese government bonds.

Taking the experience of the United States as an example, Takayoshi Okabe pointed out that some of the largest USD stablecoin issuers in the world, such as Tether and Circle, have long been giant buyers of US Treasury bonds. In order to maintain their reserves, they have purchased tens of billions or even hundreds of billions of US Treasury bonds, inadvertently becoming an important support force for the financing of the US government.

Okabe stated: "JPYC is likely to significantly buy Japanese government bonds in the future." This introduces a new wave of institutional buying power from the digital finance sector into the Japanese government bond market. This power has the potential to help stabilize or even lower the yields on Japanese government bonds, thereby reducing the government's financing costs. Conversely, countries that have lagged behind in the development of stablecoins may face upward pressure on government bond yields due to missing out on the demand from such new institutions. This also explains why many governments, including Japan, are accelerating the regulation and framework construction of stablecoins from the strategic height of national monetary policy.

Asia's collective awakening

Japan's actions are not an isolated case. Looking across Asia, a regulatory competition surrounding stablecoins has already begun. Hong Kong has officially enacted its "Stablecoin Ordinance" effective August 1, 2025, which does not aim to prohibit the circulation of foreign stablecoins such as USDT and USDC. The core focus of its regulation is on stablecoins issued in Hong Kong or pegged to the Hong Kong dollar. This clearly indicates that Hong Kong's goal is to become a global compliance hub for stablecoins, providing an ideal registration and operation center for those stablecoin issuers seeking to operate under a clear legal framework.

At the same time, South Korea is also accelerating the formulation of its stablecoin legislation, which is expected to be launched in October this year. This shows that establishing a regulatory framework for local fiat stablecoins has become a consensus among the major economies in East Asia.

As stablecoins such as the Japanese Yen, Hong Kong Dollar, Renminbi, and potentially the South Korean Won in the future thrive under their respective compliance frameworks, they weave together a blueprint for a brand new global payment network. The potential competitor to this blueprint is the SWIFT system, which has dominated global cross-border payments for half a century.

According to industry research institutions, the settlement volume of stablecoin networks has reached an astonishing scale. In July 2025 alone, the total on-chain settlement of stablecoins reached as high as $3.3 trillion. Some models predict that by 2026, the annual settlement scale of stablecoins will reach $5 trillion, which would pose a substantial challenge to SWIFT's business in specific areas.

The advantages of stablecoins compared to SWIFT are obvious: first, the costs are lower, bypassing the complex system of layered fees charged by traditional correspondent banks; second, the speed is faster, achieving almost real-time peer-to-peer settlement; third, it operates around the clock: 7 days a week, 24 hours a day, without restrictions of holidays and working hours.

In the past, these advantages were primarily reflected in US dollar stablecoins. In the future, with the rise of non-US dollar stablecoins, more direct trading corridors of "non-US dollar" will be opened up. For example, Japanese importers may be able to directly use JPYC to pay Hong Kong exporters in the future, without having to exchange yen for US dollars first, remitting through the SWIFT network, and then having the counterpart exchange US dollars for Hong Kong dollars.

The era of diversified stablecoins

Japan has approved the first yen stablecoin JPYC, which is by no means an isolated financial event. It is a key milestone in the evolution of the global financial system from a single center to a diversified structure. A world of compliant, diversified stablecoins supported by the fiat currencies of multiple major economies is transitioning from blueprint to reality.

The status of SWIFT may not be overturned overnight, but its "moat," which has long been built on network effects and path dependence, is being eroded by blockchain technology. A faster, cheaper, and more inclusive parallel financial infrastructure is taking shape. This silent revolution led by stablecoins is having a profound impact, and we may have just begun to glimpse the tip of the iceberg.