Yen stablecoins in focus: How Japan is expanding its digital financial strategy

• Japan wants to play a central role in the digital financial world with yen stablecoins
• The governing party LDP published a Web3 white paper with eleven areas of action in April 2024
• SBI Holdings and Startale Group are jointly developing the stablecoin JPYSC

Political tailwind and powerful actors

Japan has been aggressively positioning itself as a global center for blockchain technology since the ruling LDP party published a Web3 white paper in April 2024. The document formulated eleven areas of action, including stablecoins, tax reform and security tokens. Since Prime Minister Sanae Takaichi took office in October 2025, this agenda has gained momentum. As Startale Group CEO Sota Watanabe told Cointelegraph on February 27, 2026, Takaichi is perceived in the crypto industry as strategically aligned with the Trump administration, which is accelerating local crypto adoption.

One of the driving forces is the financial group SBI Group led by Yoshitaka Kitao. Together with Startale, SBI developed the stablecoin JPYSC, which is considered to be Japan’s first escrow-backed yen stablecoin project. According to a February 2026 release from Startale Group, JPYSC is issued by Shinsei Trust & Banking and is scheduled to launch in the second quarter of 2026. Sales are carried out via SBI VC Trade, the crypto trading platform of the SBI Group.

The yen carry trade is going digital

The Japanese yen is the world’s third most important reserve currency, accounting for 5.82 percent of global foreign exchange reserves, according to data from the International Monetary Fund. A key reason for this importance is the so-called carry trade: investors borrow cheap yen, exchange the funds for currencies with higher interest rates and invest in high-yield investments. This principle is to be reflected on the blockchain for the first time with JPYSC. Watanabe told Cointelegraph that global investors and institutions will be able to conduct yen carry trades around the clock and in real time, instead of relying on overlapping trading hours between Japan and the US.

In addition to SBI and Startale, Japan’s three largest banks are also planning a joint stablecoin initiative. According to a Reuters report dated October 17, 2025, based on the business newspaper Nikkei, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group plan to jointly issue a digital currency pegged to the yen. The banks are therefore working on a uniform infrastructure through which corporate customers can transfer stablecoins to one another.

The yen carry trade is going digital

Despite the institutional momentum, Japanese retail investor participation in the crypto market remains subdued. A main reason is taxation: profits from cryptocurrencies are treated as other income in Japan and can be taxed at up to 55 percent. According to a Reuters report on November 17, 2025, based on the daily Asahi, Japan’s financial regulator FSA plans to classify 105 cryptocurrencies, including Bitcoin and Ethereum, as financial products. This would reduce the tax rate to a flat rate of 20 percent and would be based on the tax treatment of stock profits.

The corresponding bill is to be introduced during the regular parliamentary session in 2026. However, there are fears in the crypto industry that implementation could be delayed until 2028. Watanabe criticized the pace to Cointelegraph, saying that given the acceleration of on-chain financing in the US, a tax cut would be necessary as early as 2027 in order not to lose touch.

D. Maier / editorial team finanzen.net

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