SBI Holdings and Startale Group Unveil JPYSC: Japan’s Pioneer Trust Bank-Backed Yen Stablecoin

Tokyo, Japan – February 27, 2024 – A significant advancement in the digital asset landscape was announced today as Japanese financial giant SBI Holdings and leading blockchain innovator Startale Group officially revealed the name of their jointly developed Japanese Yen stablecoin: JPYSC. Positioned as Japan’s first stablecoin to leverage a robust trust bank framework, JPYSC is strategically designed for institutional and cross-border applications, with an anticipated launch in the second quarter of this year, pending regulatory approvals.

A New Era for the Japanese Yen in Digital Finance

According to a statement from Startale, JPYSC distinguishes itself as the inaugural Japanese Yen stablecoin built upon a trust architecture. This foundational design ensures unparalleled security and regulatory adherence. SBI Shinsei Trust Bank, a subsidiary of SBI Group, will undertake the crucial roles of issuance and asset custody, guaranteeing full compliance with Japan’s stringent digital asset regulations. Furthermore, SBI Group’s cryptocurrency exchange, SBI VC Trade, is slated to serve as the primary platform for JPYSC’s circulation, while Startale Group will spearhead its technological development and seamless integration with blockchain infrastructure.

Addressing Market Demand and Enhancing Global Reach

The partners emphasize that in a global stablecoin market predominantly dominated by U.S. Dollar-denominated products, the introduction of a regulated, trust bank-backed Japanese Yen stablecoin is a pivotal step. This initiative is expected to significantly elevate the Japanese Yen’s prominence and utility within the evolving digital financial ecosystem, offering a compliant and reliable alternative for global participants.

Even prior to its official launch, JPYSC has garnered substantial interest, with multiple institutions and enterprises already engaging with SBI Holdings and Startale Group. This early traction underscores a burgeoning market demand for a robust Japanese Yen stablecoin across various critical applications, including efficient payments, sophisticated financial management, and streamlined cross-border settlements.

The trust bank-backed model is a cornerstone of this venture, designed to fortify governance, enhance supervisory oversight, and bolster operational safeguards. This framework is crucial for fostering the widespread adoption of stablecoin use cases within a securely regulated environment.

Vision for a Fully On-Chain Future

A core objective for JPYSC is to facilitate seamless interoperability between traditional financial infrastructure and diverse blockchain networks. Sota Watanabe, CEO of Startale Group, articulated a bold vision, asserting that JPYSC transcends the role of a mere payment instrument. He foresees it playing a central, transformative role in a “fully on-chain world.”

Watanabe elaborated on future applications, highlighting the imminent need for stable, compliant, and programmable digital currencies to underpin automated payments between AI agents and the intricate distribution of yields from tokenized assets. JPYSC aims to be the fundamental infrastructure enabling these advanced scenarios, which he believes will soon become a reality.

Japan’s Progressive Regulatory Landscape for Stablecoins

This initiative unfolds against the backdrop of Japan’s forward-thinking regulatory environment. On June 1, 2023, Japan officially implemented revisions to its Payment Services Act (Funds Settlement Act), which formally defines stablecoins as a new “electronic settlement instrument.” This landmark legislation not only lifted the prohibition on the circulation of foreign stablecoins within Japan but also mandated that any entity involved in the circulation or trading of fiat-pegged electronic payment instruments must secure the necessary government licenses.

The regulatory clarity has already paved the way for innovation. Last October, financial technology firm JPYC received approval from Japanese regulators to issue its eponymous JPYC stablecoin, marking it as Japan’s first compliant Japanese Yen stablecoin. Furthermore, the Financial Services Agency (FSA) has expressed support for collaborative stablecoin projects spearheaded by Japan’s three largest banks: Mizuho Bank, Mitsubishi UFJ Bank (MUFG), and Sumitomo Mitsui Banking Corporation (SMBC). JPYSC’s entry into this market further solidifies Japan’s position at the forefront of global stablecoin development and regulation.