Main Points :
- SBI VC Trade and SMBC enter an agreement to explore yen‑backed stablecoin issuance and infrastructure in Japan.
- Objectives: develop secure and flexible distribution, enhance efficiency of existing finance, and create user‑friendly new payment & financial services.
- JPYC aims to launch Japan’s first FSA‑approved yen‑backed stablecoin by fall 2025, fully backed by cash and Japanese Government Bonds (JGBs).
- Rising institutional attention: SMBC also collaborating with Ava Labs, Fireblocks, and TIS for tokenized asset settlement frameworks.
- Implications include faster, cheaper domestic payments and cross‑border remittances, while boosting JGB demand and modernizing financial infrastructure.
1. A New Era for Stablecoin Circulation: SBI & SMBC Join Forces
On August 22, 2025, SBI VC Trade—Japan’s pioneering regulated player in stablecoin distribution—and Sumitomo Mitsui Banking Corporation (SMBC) announced a joint exploration into the landscape of yen‑pegged stablecoin circulation domestically. Their shared vision is to create a distribution framework grounded in rigorous security and ample operational flexibility.
This collaboration targets three strategic objectives:
Efficient Domestic Circulation
The partners aim to develop a reliable mechanism for distributing yen‑backed stablecoins, ensuring both security and adaptability to meet market demands.
Enhancing Traditional Finance
Stablecoins are envisioned as a catalyst for next‑generation B2B payment infrastructure—enabling 24/7 settlement, cutting costs, and streamlining cross‑institutional transactions.
Innovating User-Friendly Payment Solutions
The project also focuses on designing seamless, approachable stablecoin applications, enabling users—both retail and institutional—to leverage digital payments effortlessly.
2. JPYC’s Trailblazing Path to Approval
Concurrently, fintech firm JPYC Inc. is forging ahead to become the first entity in Japan to launch a yen‑pegged stablecoin officially sanctioned by the Financial Services Agency (FSA). Backed one‑to‑one by cash deposits and Japanese Government Bonds, the coin is designed to mirror the stability of the yen.
JPYC’s registration process as a licensed money transfer provider is underway. Unlike many stablecoins aimed primarily at trading, this token is intended for real-world finance—from corporate payments and cross-border remittances to DeFi use cases. Ambitiously, JPYC may issue up to ¥1 trillion (~US$6.78 billion) in stablecoins over three years—a move eagerly watched by institutional investors and the JGB market.
3. SMBC Explores Tokenized Asset Settlement with Stablecoins
Earlier in 2025, SMBC expanded its stablecoin strategy by teaming up with Ava Labs, Fireblocks, and TIS. Together, they are dissecting stablecoin applications in the settlement of tokenized real-world assets—including government bonds, corporate debt, and real estate.
This initiative aligns with global trends: stablecoin market capitalization has surged to approximately US$230 billion, prompting Japan’s financial institutions to navigate regulatory clarity established by reforms to the Payment Services Act in 2023.
4. Broader Implications: Modernizing Finance and Strengthening Markets
Revamping Domestic Payments: These initiatives signal a move toward a 24/7, low-cost, on-chain payment system deeply integrated with Japan’s traditional financial framework.
Catalyzing Cross-Border and DeFi Integration: JPYC’s FSA-approved yen stablecoin and SMBC’s use-case exploration could enhance international trade finance and broaden DeFi’s engagement with real-world assets.
Impact on JGB Market: Issuers need safe, liquid collateral for these tokens—likely increasing demand for Japanese Government Bonds and influencing domestic liquidity and yields.
Global Competitive Alignment: With backing from global players like Circle, JPYC’s yen stablecoin positions Japan as a regional hub for digital finance, offering familiar regulatory safety and interoperability for cross-border crypto infrastructure.
Conclusion
Japan stands at the cusp of a financial transformation—driven by strategic alliances and technological innovation in the stablecoin space. SBI VC Trade and SMBC are laying the foundation for secure, efficient, and flexible yen‑pegged digital currencies domestically. JPYC’s forthcoming FSA‑approved stablecoin marks a pivotal step forward, bridging regulated finance with blockchain-enabled services. Collectively, these developments could reshape domestic payment systems, accelerate cross-border commerce, and influence capital markets—propelling Japan into the forefront of the global digital finance era.
