Japan's Financial Services Agency approves the issuance of the first yen stablecoin JPYC, with market attention on its impact on JGB yields and travel payments (Background: All sold out! Japan's Bitcoin reserve company Value Creation liquidates BTC, what did it see?) (Additional context: Real-life FX warriors! Japanese live streamer All in binary options, 30,000 turned into 150,000 → 0 yen) The Japan Financial Services Agency (FSA) has approved the official issuance of the domestic yen stablecoin JPYC this autumn, creating a shift in a market still dominated by USD stablecoins globally. This move not only increases digital payment options for the public but also signals Japan's intention to gain a voice in the stablecoin race, reducing reliance on foreign currencies through new tools. Japan's 'regulate first, innovate later' approach According to Nikkei reports, JPYC was approved under the revised Payment Services Act of 2023 and is issued by Tokyo fintech company JPYC Inc. as a licensed remittance service provider. Each JPYC is backed by an equivalent deposit of yen and Japanese government bonds (JGBs), forming a one-to-one reserve mechanism. This breaks the previous situation where only USD stablecoins circulated in the Japanese market, highlighting Japan's desire to strengthen its financial autonomy in the digital asset space. Unlike some countries that adopt a 'run first, regulate later' approach, Japan chooses to guide the market through strict regulations. The approval of JPYC shows that the FSA prioritizes consumer protection and market stability, gradually opening up innovation. This framework is regarded as one of the most rigorous templates globally and is expected to attract domestic banks and securities firms to accelerate research on blockchain and decentralized finance (DeFi) services, paving the way for the integration of traditional finance and new technology. Prospects and challenges coexist After the launch of JPYC, the Japanese market may benefit in terms of payment options and cross-border remittance efficiency. However, whether it can amplify its influence still depends on public acceptance, merchant adoption speed, and the rapidly changing competition in the global stablecoin landscape. Nevertheless, JPYC has already cast a pivotal stone: it brings stablecoins from the crypto sphere into the sovereign bond market, revealing a convergence point for future finance—policymakers and market participants will rebalance risks and returns under new tools. If Japan successfully accelerates the promotion of JPYC payments, it could significantly change the market landscape, increasing the actual market demand for yen. People and investors outside Japan are expected to obtain JPYC directly through the services of Tokyo fintech companies, and JPYC is also expected to achieve one-click currency exchange at various partner banks; if travelers no longer need to exchange yen in advance before coming to Japan but can convert as needed through related apps, it could also change the current state of the yen exchange market, posing challenges for many banks' physical currency exchange counters and merchants with high foreign exchange service fees. New momentum for bond buying emerges The inclusion of JGBs in the JPYC reserve pool means that the larger the issuance scale, the stronger the demand for government bonds. JPYC Inc.'s representative Okabe emphasized this relationship through the X platform, using the U.S. experience as an example: "Top stablecoin issuers are already important buyers of U.S. government bonds; if Japan follows, it can be expected to lower yields and reduce government financing costs." When stablecoin issuers participate in the government bond market, the buying structure of traditional institutions will be redistributed, with potential pressure to push yields downward, thereby affecting the flexibility of Japan's fiscal and monetary policy operations. Related reports Japan's largest Osaka Exchange plans to launch cryptocurrency derivatives, JPX is also considering launching crypto ETFs Metaplanet CEO interview: From Japanese hotels to 'Asian micro-strategies', the way Bitcoin layout of the stock surge king Japan's major game company Gumi buys 1 billion yen in Bitcoin, next step to push for crypto funds targeting institutions "Going abroad without exchanging currency? Japan approves stablecoin JPYC to launch this autumn, reshaping yen payments and trillion-yen government bond market" This article was first published on BlockTempo (the most influential blockchain news media).