In the evolving landscape of cryptocurrency regulation, Japan took the lead by establishing the world’s first comprehensive stablecoin rulebook in 2023. However, the anticipated surge in adoption has not materialized as expected. According to Takashi Tezuka, country manager of Startale Group, Japan’s focus on systemic stability is impacting its ability to innovate quickly in comparison to the US. “Japan prizes systemic stability above innovation speed, while the US is signaling a bigger market-opening play,” Tezuka noted.
While the US has introduced the GENIUS Act, a regulation seen as a catalyst for stablecoin adoption, Japan’s earlier reforms highlight a crucial truth: clarity in regulation does not always lead to immediate utility. Although Japan’s legal framework allows for licensed issuers, the country has yet to see a vibrant yen-stablecoin economy.
Under Japan’s amendment to the Payment Services Act, stablecoin issuance is restricted to licensed banks, trust banks, and registered money transfer agents. In sharp contrast, the GENIUS Act broadens the scope, enabling not only banks but also federally licensed non-bank corporations to issue stablecoins, provided they comply with specified reserve and regulatory standards. This distinction raises questions about the efficacy of Japan’s restrictive approach.
Despite the current gap in adoption rates, experts suggest that Japan’s methodical, infrastructure-focused strategy may ultimately allow it to catch up. Global firms are working on building the infrastructure necessary for enterprise-grade capital markets, positioning Japan favorably as the regulatory environment matures. The first yen-backed stablecoin is set to launch soon, with local fintech company JPYC stepping up to facilitate blockchain-based remittances and payments.
Moreover, the potential entry of major firms like Monex Group could add credibility to Japan’s stablecoin landscape. Currently, the global stablecoin market, valued at roughly $270 billion, is dominated by US-dollar tokens. However, with regulatory challenges being addressed, Japan is poised for a significant breakthrough.
Tezuka asserts that Startale’s initiatives, including a partnership with financial giant SBI, aim to enhance stablecoin adoption through innovative solutions for trading tokenized assets. With a focus on programmable treasuries and automated capital allocation, Japan’s corporate sector is beginning to embrace the advantages of stablecoins. This shift may usher in a new era for stablecoins in Japan, characterized by greater liquidity and accessibility for investors.
