Japan's stablecoin ecosystem is rapidly evolving, marked by a clear division between globally dominant USD-backed tokens and emerging yen-denominated alternatives vying for domestic adoption. The market is witnessing a surge in partnerships and pilot programs as financial institutions and fintech companies position themselves in a landscape being reshaped by recent regulatory changes.
The competition is stark. At Tokyo's Haneda Airport, a pilot program led by fintech firm Netstars allows travelers to pay with USD stablecoins, a choice driven by their widespread use among international visitors. "The pilot at Haneda Airport is just the first step in demonstrating a use case, and based on the results of this pilot, we hope to expand usage across more locations and payment methods," said Saori Okuyama of Netstars. She emphasized that the primary challenge is not technology but building merchant acceptance: "The challenge for stablecoins is not technology, but building places where people actually use them."
On the domestic front, JPYC, Japan's first licensed stablecoin issuer, is aggressively pursuing mass adoption. Following the amendments to the Payment Services Act in 2023 and receiving its license in August 2025, JPYC has issued over one billion yen ($6.3 million) in tokens since its October launch. The startup has signed a memorandum of understanding with Line to explore integrating its yen stablecoin into a LINE-based wallet for everyday payments. It has also formed a capital and business alliance with Asteria Corporation to connect the stablecoin to corporate accounting and payment software. "Using JPYC inside LINE could be a turning point for stablecoin adoption in Japan," said Noritaka Okabe, CEO of JPYC.
Japan's megabanks are not sitting idle. Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Bank announced plans in November to jointly issue a yen-denominated stablecoin, followed by a USD-backed version. While still in the proof-of-concept stage, the banks aim to avoid market fragmentation. "We don’t want a chaotic proliferation of incompatible systems like in the early days of cashless payments," said Akio Isowa, Chief Digital Innovation Officer at SMBC. Separately, Resona Bank and JCB are conducting a pilot program with the goal of introducing stablecoin-based retail payments by 2027, promoting them to retailers as a way to cut transaction fees.
This domestic push collides with a global market where USD stablecoins, like USDT and USDC, command approximately 90% of circulation. Financial authorities have warned that if Japan does not act, other currencies will fill the gap. SMBC's Isowa echoed this concern: "USD stablecoins have already become the de facto standard in crypto trading. If the development of yen stablecoins is delayed, their presence could be hollowed out within digital payment infrastructure." The consensus among banks and fintechs is that rapid scaling for wholesale and corporate use is the solution, leveraging the banks' existing interoperability with on and off ramps.
