Stablecoin issuer JPYC received Japan’s first funds transfer service provider license today, claiming it is the first such license granted to a digital currency issuer. The Nikkei had reported earlier that JPYC was expected to receive approval this month, potentially enabling it to launch a regulated yen stablecoin by October.

The development represents a significant milestone for Japan’s digital finance strategy. With the yen ranking as the fourth most widely used currency for cross border payments according to Swift statistics, regulated yen stablecoins could play an important role in international payments in the future.

The licensing breakthrough follows Japan’s establishment of a comprehensive stablecoin framework in June 2023. The Payment Services Act now recognizes three types of digital currencies: those issued by banks and backed by deposits; trust bank stablecoins with ringfenced assets; and tokens issued by funds transfer firms such as JPYC, backed by bank deposits and government bonds.

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