Japan targets Asian settlement market with yen stablecoins

Japan should encourage the use of yen-backed stablecoins for settlements across Asia and establish a legal framework allowing the trading of cryptocurrency exchange-traded funds (ETFs), according to a proposal submitted to the government by a ruling party panel on Monday, News.Az reports, citing Reuters.

The proposal stated that crypto ETFs would offer investors a simple and accessible way to invest, while urging the government to officially recognize such products as legitimate investment tools within the financial market.

The recommendation was submitted by the Liberal Democratic Party’s panel on blockchain technology promotion to Finance Minister Satsuki Katayama, who also supervises Japan’s financial regulator, the Financial Services Agency (FSA).

Following the meeting with Katayama, panel member and lawmaker Junichi Kanda told reporters that Japan could use next year’s Asian Development Bank annual meeting, which it will host in May, to highlight the country’s efforts in blockchain innovation and the promotion of yen-based stablecoins.

“We urged the government to take steps to promote yen stablecoins for settlement in Asia in the future,” Kanda said.

A crypto ETF is a financial instrument that enables investors to gain exposure to cryptocurrencies without directly owning or managing the digital assets themselves.

The FSA has been encouraging domestic financial institutions to adopt blockchain technology to improve innovation and streamline operations.

Japan’s three largest banks have already announced a joint project, supported by the FSA, to experiment with issuing stablecoins. Meanwhile, local startup JPYC began issuing yen-pegged stablecoins in October, marking a notable development in a country where many consumers still favor traditional payment systems.

At the same time, dollar-backed stablecoins have seen rapid growth with strong support from U.S. President Donald Trump. Policymakers have raised concerns that stablecoins could enable funds to move outside regulated banking systems and weaken the role of commercial banks in global payment networks.

Last month, Bank of Japan Deputy Governor Ryozo Himino called for a “holistic approach” to designing the future global monetary system, stressing that discussions should not be limited only to central bank digital currencies and stablecoins.

News.Az 

By Nijat Babayev