Japanese startup JPYC is set to launch the nation's first stablecoin pegged to the Japanese yen later this year, following the acquisition of a crucial license. The digital currency, also named "JPYC," will be fully convertible to the yen and backed by domestic savings and Japanese government bonds (JGBs), according to CEO Noritaka Okabe. Key Takeaways JPYC aims to be the first stablecoin pegged to the Japanese yen. The stablecoin will be fully convertible and backed by JGBs and domestic savings. Initial demand is expected from institutional investors, hedge funds, and family offices in Japan. The company plans to expand usage internationally as a "digital yen." Stablecoin Backing and Business Model JPYC's stablecoin will be fully backed by a combination of domestic savings and Japanese government bonds (JGBs). This backing ensures the stablecoin's value remains consistently pegged to the yen. The company's CEO, Noritaka Okabe, stated that JPYC will not charge transaction fees. Instead, the startup plans to generate revenue from the interest earned on its holdings of JGBs. As the number of issued stablecoins grows, so will the company's JGB portfolio, creating a sustainable revenue stream tied to the stablecoin's circulation. Market Outlook and Global Context Initially, JPYC anticipates strong demand from institutional investors, hedge funds, and family offices within Japan. However, the long-term vision extends globally, aiming for JPYC to be utilized internationally as a "digital yen" and accessible to users worldwide. The launch comes at a time when blockchain-based stablecoins are gaining significant traction globally due to their potential for faster and cheaper transactions compared to traditional payment systems. In contrast to Japan's forward-looking approach, mainland China, where crypto trading is prohibited, has seen regulators actively discouraging endorsements of stablecoins to curb domestic investor interest. This highlights the diverse regulatory landscapes surrounding digital currencies across different nations. Sources Japan startup to issue first yen-pegged stablecoin, Reuters.