Japan’s stablecoin market is heating up, with many new partnerships forming around Japan’s first yen-denominated stablecoin. Banks and major corporations are currently experimenting with stablecoins backed by both yen and dollars for real-world payments.
But a clear divide is beginning to take shape. While USD stablecoins dominate global transactions, yen-denominated coins are positioned as a low-cost, homegrown option for domestic commerce and corporate payments.
dollar yen disparity
Souvenir shops at Tokyo’s Haneda Airport now allow travelers to pay with US dollar stablecoins. The trial will be led by Japanese fintech company Netstars and will run until mid-February.
She told Cryptopolitan that USD stablecoins, which are widely used among international travelers, make the most sense for airports.
Currently, 90% of stablecoin circulation is tied to the US dollar, and the majority of these transactions take place outside the US.
Saori Okuyama of Netstars said, “The trial operation at Haneda Airport is just the first step to demonstrate the use case. Based on the results of this trial operation, we hope to expand its use to more locations and payment methods.”
Okuyama said the decision to trial physical payments reflects the company’s belief that more merchants are needed for stablecoin payments to become widespread.
“The challenge with stablecoins is not the technology, but building a place where people will actually use them,” Okuyama says.
JPYC aims for mass recruitment
JPYC, Japan’s first licensed stablecoin issuer, is pushing yen-backed tokens into mainstream finance through business partnerships.
The company signed a memorandum of understanding (MOU) with LINE on January 20th, and is considering integrating stablecoins into LINE-based wallets for everyday payments in order to expand its consumer reach.
JPYC is also aiming to be adopted by companies. On February 4, the company announced a capital and business alliance with software company Asteria Inc. to link the Yen stablecoin with accounting and payment software, allowing companies to experiment with digital payments without changing their internal systems.
JYPC obtained Japan’s first stablecoin license in August 2025 following the amendment of the Payment Services Act in 2023. Since officially launching the Yen stablecoin in October, JPYC has celebrated a token issuance milestone of over 1 billion yen ($6.3 million).
“Using JPYC within LINE could be a turning point for stablecoin adoption in Japan. Rewards and everyday payments in particular could create a typical use case for the Yen stablecoin,” said Noritaka Okabe, CEO of JPYC.
Okabe believes that stablecoins will only expand in the future as AI agents start making purchases on behalf of individuals.
The end of bank profitability
Taku Kikushige of NTT Data Institute of Management Studies does not expect the yen stablecoin to take over bank deposits or become the preferred payment method for companies.
Rather, a more serious problem is the dilution of banks’ customer contact points due to the “externalization” of payments. He said on January 16 that banks, especially local banks and credit unions, need to rethink their existing business models to survive.
“Once stablecoin payments are integrated into business processes, bank accounts will no longer serve as the starting point or focal point for payments; they will become a temporary transit point for funds.”
Kikushige warns that the shift to digital payments will not dry up bank deposits overnight. He said banks may not know which customers are most likely to move their funds until they run out.
Big banks want a piece of the stablecoin pie
In 2026, Japan’s megabanks are determined to play a role in the future payments infrastructure. The flurry of stablecoin efforts by banks stems from the understanding that bank-centric B2B and cross-border payment infrastructures are no longer the most efficient.
Last November, Bank of Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Bank jointly announced plans to issue a yen-denominated stablecoin, followed by a US dollar-denominated stablecoin.
The joint stablecoin project is still in the proof-of-concept stage and the cooperation has not been finalized. However, Akio Isokazu, chief digital innovation officer at Sumitomo Mitsui Banking Corporation, said the aim from the beginning was to avoid the fragmentation that had plagued the introduction of cashless payments in Japan.
“We don’t want to see a proliferation of incompatible systems, like in the early days of cashless payments,” Isova said. “From the beginning, we wanted a platform with common terms and standards that would ensure interoperability for companies to compete at the application layer.”
Resona, Japan’s fifth-largest commercial bank, and Japanese credit card company JCB are also moving to introduce stablecoin-based payments in their retail sectors. Demonstration tests will be conducted at some JCB member stores, with the aim of commercialization by 2027.
Resona and JCB said they are promoting stablecoins to retailers as a way to reduce transaction fees. But underlying this is an existential inquiry into whether blockchain payments can outperform card networks without sidelining banks.
USD stablecoins already own the space
Japan’s foray into yen-denominated stablecoins is clashing with a market already dominated by US dollar stablecoins.
Financial Services Agency officials have warned that if Japan does not take stablecoins seriously, other currencies will fill the void. SMBC’s Akio Isowa expressed similar concerns, saying that Japan cannot risk delaying the rollout of yen-backed stablecoins.
“The US dollar stablecoin has already become the de facto standard for cryptocurrency transactions. If the development of the yen stablecoin is delayed, its presence within the digital payment infrastructure could be hollowed out,” Isao said.
Scaling is the solution
The best solution for banks and fintechs is to rapidly scale up yen-backed stablecoins for wholesale and corporate use.
Isova said one of the advantages banks have is on-ramp and off-ramp interoperability, thanks to extensive interbank payment and domestic remittance systems that private issuers like JPYC do not have access to.
Still, Isao said he is enthusiastic about cooperation and sees no reason why JPYC and megabank stablecoin projects cannot coexist.
