JPYC misses circulation target as Japan stablecoin rules slow adoption

Traders Union
All News
Crypto
JPYC stablecoin faces hurdles

Highlights

JPYC's circulation totals only 3.2 billion yen as of Oct. 23, about 25% of its first-year target, due to weak growth and high redemptions.
Regulatory issuance cap of 1 million yen per request under Japan’s Type II funds-transfer rules hampers both retail and corporate adoption, as seen with Asteria’s staggered holdings.
Japan’s Financial Services Agency aims to review stablecoin regulations and release a revised roadmap by early 2027, potentially impacting JPYC’s tenfold growth target.

First-year performance and regulatory constraint

As reported by CoinDesk, citing NADA NEWS, JPYC Chief Executive Officer Noritaka Okabe says the yen-backed token is not growing as the company expected, with circulation reaching only about a quarter of its original target in the first year.

Only 3.2 billion yen, about $20 million, is in circulation as of Oct. 23, compared with cumulative issuance of 12.1 billion yen reported by Nikkei. The gap suggests a significant share of tokens has already been redeemed, making it difficult for the issuer to keep funds in circulation long enough to support scale.

JPYC's circulation briefly rises above 4.2 billion yen in September after South Korean exchange Upbit lists the token. That listing pushes the market price above 1 yen and triggers arbitrage-driven minting, with Okabe estimating that roughly 35 billion yen changes hands across Upbit and Uniswap in a single day before circulation falls back to around 3 billion yen.

The level of circulation is central to JPYC's business model because the stablecoin is backed by bank deposits and Japanese government bonds, and the issuer earns interest on those reserves. Okabe blames part of the weak performance on Japan's Type II funds-transfer rules, which impose a 1 million yen issuance ceiling; while JPYC eases its controls in May to allow 1 million yen per request rather than per day, it still limits rapid repeat transactions.

Corporate uptake and market implications

The transaction cap is also slowing corporate adoption. Software company Asteria, which plans to hold 1 billion yen in JPYC, is building that balance in installments rather than in a single move because of the restriction.

The muted circulation figures come despite a growing list of business tie-ups. Logistics firm AZ-COM Maruwa signs an alliance in July to develop payments for about 2,300 business partners, while SBJ Bank and LINE NEXT agree earlier this month to test bank-linked stablecoin wallet top-ups, although that initiative remains at the trial stage.

The broader regulatory backdrop may shape JPYC's second year. Japan's Financial Services Agency is reviewing stablecoin rules and is expected to publish a roadmap in early 2027, while Okabe now wants circulation to reach tens of billions of yen, implying roughly tenfold growth from current levels.

In our earlier coverage of Philippine sovereign bond market reforms, we explained how the shift to a new pricing convention and planned index inclusion are intended to improve liquidity and broaden the investor base. We also noted that these market-structure upgrades don’t automatically translate into stronger real-economy investment unless they are backed by fiscal credibility, lower frictions in corporate financing, and wider structural reforms that deepen domestic capital markets and investor trust.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.