TLDR
- Japan is preparing to launch its first fully collateralized yen-backed stablecoins later this year
- Monex Group and JPYC are leading efforts to create yen stablecoins for international remittances and settlements
- JPMorgan is committing up to $500 million to crypto-friendly hedge fund Numerai
- Bank of Japan is expected to raise interest rates in Q4 2025, potentially boosting yen and yen-backed assets
- Rising Japanese government bond yields and strengthening yen have impacted BTC/JPY, which dropped 8% this month
Japan, which established the world’s first regulatory framework for stablecoins, is finally set to have blockchain-based representations of its national currency. After years of careful preparation, Japanese companies are preparing to launch the country’s first fully collateralized, yen-backed stablecoins later this year.
Tokyo-based fintech firm JPYC plans to register as a money transfer business this month and will lead the rollout of a JPY-pegged stablecoin trading at a 1:1 ratio with the Japanese yen. This development comes after Japan took a more cautious approach compared to other countries, focusing on building proper infrastructure before launching digital versions of its currency.
Takashi Tezuka, Japan’s country manager at Web3 infrastructure provider Startale Group, told Cointelegraph that the gap between Japan and the United States on stablecoins reflects different philosophical approaches. “The GENIUS Act was greeted with a mix of relief and curiosity,” Tezuka said, referring to the latest US stablecoin bill. “Relief, because the US has finally caught up with what Japan did two years earlier — putting a comprehensive legal framework around stablecoins.”
JPYC isn’t alone in this space. Monex Group, a Tokyo-based financial services company, has also announced plans to explore launching its own yen-backed stablecoin. The company sees potential for enhancing yen-denominated international remittances and corporate settlements.
“Issuing stablecoins requires major infrastructure and capital, but if we don’t handle them, we’ll be left behind,” Monex Group Chairman Oki Matsumoto told local media. While the company hasn’t fully committed to an issuance yet, Matsumoto indicated Monex “will respond properly” to this emerging market opportunity.
Timing with BOJ Rate Hikes
The timing for these stablecoin launches aligns well with expected monetary policy changes. Both leading bankers and traders anticipate the Bank of Japan (BOJ) will hike interest rates in the coming months, while the U.S. Federal Reserve is expected to move in the opposite direction.
🇯🇵⚖️ Japan is preparing for its first yen-denominated stablecoin launch this fall, with JPYC leading the initiative. This coincides with the Bank of Japan's expected interest rate hike, set to boost the yen's appeal.
The anticipated BOJ rate hike and strengthening yen could draw… pic.twitter.com/3q9BkywB9E
— Osiris News (@NewsOsiris) August 31, 2025
Hiroshi Nakazawa, head of Hokuhoku Financial Group, one of Japan’s largest regional banks, said the BOJ could raise interest rates in either October or December, assuming “things go smoothly.” This outlook matches the broader market consensus on upcoming rate hikes.
According to Bloomberg Economics, recent Tokyo inflation reports have likely reinforced the BOJ’s view that consumer price momentum remains strong, on track to reach its 2% target. Their team forecasts a 25 basis point rate hike at the BOJ’s October meeting.
These anticipated rate hikes could drive investors toward JPY-backed stablecoins. This pattern was observed during the 2022 Federal Reserve rate hike cycle, which boosted demand for USD-pegged stablecoins before the Terra crash temporarily reduced their appeal.
Impact on Markets and Cryptocurrency
Yields on longer-duration Japanese government bonds have climbed to multi-decade highs, reflecting fiscal concerns and strong expectations of BOJ rate hikes. The 30-year JGB yield recently surged to a record high of over 3.2%, while the 10-year yield reached 1.64%, levels not seen since 2008.
The yen’s appeal is further enhanced by the narrowing gap between U.S. and Japanese 10-year yields, which has tightened to 2.62%, the lowest since August 2022. Since the USD/JPY exchange rate closely tracks this yield differential, regression analysis suggests potential appreciation in the yen.
This strengthening yen and expected rate hikes have already impacted cryptocurrency markets. The BTC/JPY pair listed on bitFlyer has dropped 8% this month, hitting its lowest level since July 9. This sell-off has triggered a classic double top bearish reversal pattern on daily charts, suggesting further downside risk for bitcoin priced in yen.
Wall Street’s Growing Crypto Interest
While Japan prepares its stablecoin launch, traditional financial institutions continue warming to digital assets. Wall Street heavyweight JPMorgan plans to commit up to $500 million to Numerai, a crypto-friendly hedge fund known for using artificial intelligence and crowdsourced models.
Numerai said the capital will be deployed over the next year and would nearly double its assets under management, currently around $450 million. The fund delivered more than 25% net returns last year by blending crowdsourcing, AI, crypto and other quant-driven strategies.
Following the announcement, Numerai’s native cryptocurrency, Numeraire (NMR), surged over 120% and last traded above $120. For JPMorgan, the deal marks another step forward for a bank that once heavily criticized digital assets but has steadily expanded into the sector.
Meanwhile, healthcare company KindlyMD has announced plans to expand its Bitcoin acquisition strategy with a massive $5 billion at-the-market equity offering to fund general corporate purchases, including large-scale Bitcoin buys. The company launched its Bitcoin strategy earlier this month with a $679 million purchase and has set an ambitious goal of acquiring 1 million BTC.
The FSA is expected to approve Japan’s first yen-denominated stablecoin as early as this fall, marking a major step forward in Japan’s digital currency landscape.
