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Shunsuke Saito
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Image caption: From left to right: Shunsuke Saito (Editor in Chief: Cryptonews Japan), Kengo Shoda (STABLECOIN CLUB), and Ryunosuke Hidaka (STABLECOIN CLUB)
Cryptonews.com caught up with the co-founders Kengo and Ryunosuke from the STABLECOIN CLUB , as it lays out the stall for its plan to become the premier digital asset vehicle to take the Yen global.
Stablecoins are gaining traction worldwide, especially in Japan. And interest is heating up, helped along by the country’s Financial Services Agency regulator’s announcement earlier this year of the establishment of its stablecoin division.
On top of that, the entry of giants such as SBI Holdings into the sector, the stablecoin market could be about to enter the exponential phase of an S-curve adoption supercycle.
Regulated vs Unregulated and the Case for Flexibility
There are two regulated Yen stablecoins on the market: JPYC and JPYSC (the latter a partnership between SBI Holdings and Startale). But with regulation comes restrictions that could hamper innovation and growth outside of Japan, and that’s presumably where JPYR comes in?
Kengo Shoda jumps in. “Yes, exactly. As a project without a centralized operating company, we at the STABLECOIN CLUB do not view this as a matter of one stablecoin being better than the other, whether regulated or unregulated. Instead, we should see this as rather a difference in target markets.”
“Because laws and rules regarding crypto assets are extremely strict in Japan, stablecoins that comply with these regulations have a strong advantage in domestic use cases.”
So conversely, unregulated Yen stablecoins have an advantage globally?
“That’s right,” says Kengo Shoda. “JPYR is the only Yen stablecoin capable of leveraging the strengths of the Japanese Yen globally.
“We anticipate that domestic residents will increasingly use regulated stablecoins to pay for goods and services and taxes. JPYR, on the other hand, will primarily be used for international remittances, global service settlements, and cross-border trade.
Taking the Yen Global in the Digital Asset Domain
The Japanese Yen is one of the top internationally traded currencies and is often seen as a safe haven during times of geopolitical and macro stress.
For sure, there is a significant opportunity to globalize the Yen in the digital asset space, but in what ways does being fully regulated by the FSA hold back the global adoption of stablecoins like JPYC and, as a consequence, place JPYR at an advantage?
“When interacting with blockchain networks or integrating with new overseas protocols, regulated entities must undergo strict compliance reviews and complex approval processes each time,” Kengo Shoda explains.
“We analyze that this acts as a significant hindrance to the speed of global expansion. Another factor is that within the global DeFi ecosystem, transfer restrictions and KYC (Know Your Customer) requirements could make seamless deployment difficult, if not impossible. The flexibility of JPYR is a distinct advantage.”
Image caption: Co-founders Kengo Shoda (left) and Ryunosuke Hidaka (right)
JPYR: Yen-Pegged Stablecoin With100% Japanese Yen Reserves
You mentioned the strictness of Japan’s crypto regulations, but in many ways, it has been out in front in providing clarity to the industry. For instance, Japan’s Payment Services Act has been lauded for its unique 3-tier licensing.
Given the debates in the US and the long-running controversy over Tether’s reserves, users and investors will want to be confident that JPYR’s reserves backing the stablecoin are high-quality and liquid. What types of assets does JPYR use to back its stablecoin?
“With JPYR’s 1:1 peg, users of the stablecoin can rest assured that the reserve is 100% in Japanese Yen.
“What’s more, we collaborate with multiple top-tier market-making teams to constantly provide appropriate liquidity, thereby keeping the price maintenance mechanism fully functional at all times.
“The specific breakdown of underlying liquid assets and operational figures is kept private. This is because we don’t have a disclosure framework based on Japan’s Payment Services Act.
Expanding on the point, Kengo Shoda continues: “Confidence is built on the transparency of JPYR’s on-chain data, which proves that under all market conditions, JPYR consistently maintains a stable 1:1 peg. It is this operational track record that provides our users with the confidence they need.”
Japanese Stablecoin – From DeFi Powerhouse to Cross-Border Infra Provider
Aside from its initial use case as a trading proxy for the dollar, Decentralized Finance (DeFi) has long been a hub for incubating and innovating stablecoin deployments.
JPYR and the IZAKA-YA wallet are the cornerstones of Japan’s emerging DeFi landscape. Can you say something about how that is playing out with JPYR and IZAKA-YA, and what other product types you see gaining traction?
“JPYR and IZAKA-YA are strengthening partnerships with various specialized services to build a unique ecosystem. Regarding JPYR, utilization has already begun in lending services through IZAKA-YA and in crypto-collateralized loans.
“Furthermore, we are actively exploring use cases tied to cross-border payments and real-world assets, an area of growing significance.
“We also think that the successful deployment of these products in a user-friendly manner is the key factor that will help accelerate market traction.”
How JPYR Plans to Grab a Slice of a $92.5 Billion Yen Stablecoin Opportunity
According to estimates from the Megabank Consortium, the stablecoin market could grow to ¥1.5T – ¥2T (~$9.4B – $12.6B) by 2029, and in five years could be 10x that at ¥14.7T (~$92.5B), according to the Yano Research Institute.
Cross-border payments and tokenization will be a large part of that growth narrative. How is JPYR positioning for this upcoming explosion and potential competition from megabanks like Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho?
“Rather than competing head-on with the megabanks, JPYR is positioning itself as a cross-border payment and remittance infrastructure provider, based on the foundation of the Japanese Yen being the third-most-traded currency globally and a trusted safe-haven asset.
“Our strategy at JPYR is to expand by leveraging the strength of the Yen brand to capture a significant segment of the stablecoin market.”
Stablecoins are often touted as a superior form of money because of their programmability. We asked the JPYR leaders to elaborate on the attractions of blockchain technology and the efficiency gains it enables across treasury, settlement, and audit-trail processes, among other areas.
“As you pointed out, the core appeal is that stablecoin programmability eliminates intermediaries, drastically accelerating and reducing the costs of all financial and back-office operations.
“More generally, JPYR’s blockchain technology unlocks comprehensive efficiency gains compared to traditional finance: faster speeds and reduced fees for settlements; automation and unmanned operations for treasury management; and the realization of ultimate transparency through on-chain data for audit trails.”
Who’s Afraid of USDC and USDT? Not JPYR
So what about the competition beyond Japan? Do JPYR’s founders think the issuers of USDC or Tether (USDT) might enter the Japanese Yen market? Are they a threat?
“We believe it is highly likely that these issuers will enter the Yen market. However, it is likely that expansion in Japan, with its strict regulations, will be quite limited for them.
“With that in mind, from our perspective, we do not view an increase in issuers entering the Yen market as a threat; rather, we see it as a powerful tailwind that can drive greater expansion of the Yen market.
JPYR is a project that is in the right place at the right time. Has there been interest in JPYR from other companies seeking to form partnerships? Also, could stablecoins like JPYR become serious contenders in consumer payments, as well as in the B2B sector?
We are not able to disclose the discussions we are currently involved in. As core members of the Stable Coin Club DAO, we directly receive numerous approaches from companies interested in JPYR.
We are absolutely confident that stablecoins will become an essential part of the financial infrastructure of the future, not only in the B2B sector but also in the B2C (consumer) sector too.
STABLECOIN CLUB official site: https://stablecoin.limited/
Get JPYR: https://www.btse.com/ja-JP/trading/JPYR-USDT
JPYR official site: https://jpyr.org/
JPYR Whitepaper: https://jpyr.org/whitepaper.pdf
X: https://x.com/JPYR_official
Telegram: https://t.me/JPYRofficial
