At the Webx Fintech Expo in Osaka last Friday, panelists discussed Japan’s evolving and stable landscape, highlighting the gap between regulatory advances and actual adoption.
Participants include Akio Iowa of Mitsui Financial Group, Tatsuya Site, the CEO of the program, and Andtakakaba, Japan Manager of the circle, moderated by Sapagami, COO/CFO of Dipemans.
Japan and the US: A contrasting approach to stable regulation
The Japanese financial sector has witnessed a growing interest in Stubcoin, a digital currency that has 1:1 fixed to Fiat. On August 19, Japanese financial services institutions approved JPYC, the country’s first yen-backed stub coin scheduled to be officially issued this fall. However, regulatory oversight has been in place since 2022, giving Japan the advantage of first me bars.
In contrast, US stubcoins like Tether’s USDT and Circle’s USDC were widely adopted before federal law. The Genius Act, passed by Congress and signed by the President in July, now establishes a regulatory framework for publishers, including federal oversight for issues over $10 billion.
Sakakibara in the circle highlighted three important differences.
- Japan introduced pioneer stubcoin regulations in 2022, serving as a reference for other countries.
- US law now imposes large-scale publications of federal supervision.
- Transaction caps differ, with Japan limiting relocations to 1 million yen, a sharp contrast to the US.
Isova said, “In the US, the total issuance of 30-40 trillion yen tethers and circles is promoted to short-term government bond yields. Japan’s low yields limit growth opportunities.” He also highlighted the challenges of money laundering. “Banks control AML, but with Stablecoins, issuers need to ensure compliance itself. This remains an important issue.”
From left: Kenta Sakagami, Akio Isowa, Tatsuya Saito, Kenta Sakakibara
Stablecoin provider challenges
Tatsuya Saito, CEO of Progmat, a digital asset infrastructure platform co-founded by major banks, discussed operational hurdles. “The impact of regulations varies slightly depending on whether the provider is a bank or a crypto adjacent company,” he explained.
He explained in detail. “Retail transactions rarely exceed 1 million yen, but banks that handle wholesale transfers for corporate and institutional clients face stricter rules. Ensuring compliance across all scenarios is a challenge.”
Market potential and global ripple effects
Panelists agreed that JPYC’s launch as a stubcoin supported by JPYC’s first circle represents a significant milestone. Sakakibara explained the circle’s strategy. “We launched the USDC business in Japan at the end of March. The market shares use case ideas, including moving wholesale international payments and the Ministry of Finance operations to Stubcoin.
Japan’s experience with cashless payments for QR codes since the late 2010s informs the adoption of potential Stablecoin. “Initially, multiple QR payment systems caused consumer disruptions, but interoperability has improved. Stability is likely to follow a similar path. Early adjustments are important, where the tokens adopted are important.”
He added that wholesale banking could benefit from internal stubcoins. “Global companies pool funds through cash management systems, but differences in time zones slow down transfers. They allow for stability movements, increased efficiency and increased labor productivity.”
Benefits of Stablecoin over Cashless Systems
Saito highlighted the technical advantages. “Current cashless payments are siloed per merchant database to prevent interoperability. Stablecoins, built on sharing standards, allow for easy exchanges between different tokens.”
He predicted market consolidation. “Initially, multiple idiots appear, but converge over time.” Saito said, “The issuance of Genius Law and JPYC is a call for awakening for the Japanese financial sector. Ignoring stability poses greater risk than engaging with them.”
Post-Japan Stubcoin Advancement: Regulation Lead, Adoption Lag first appeared in Beincrypto.
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