Author: @BlazingKevin_, the Researcher at Movemaker

Real Adoption and Expansion of Dollar Stablecoins

In our previous analysis, we argued that the birth of Plasma was a key strategic move by Tether to fundamentally transform its business model from a passive "stablecoin issuer" to an active "global payment infrastructure operator," aiming to recapture the immense value seized by third-party public chains. The urgency and importance of this strategic layout are continuously amplified by an irreversible macro trend: the adoption of dollar stablecoins in the real world is undergoing a significant paradigm shift and entering an accelerated expansion phase.

1. Quantitative Expansion of Market Size

First, from a macro data perspective, the overall scale of the stablecoin market is experiencing a new round of structural growth. Compared to the market cycle two years ago, the total market capitalization of global stablecoins has risen from about $120 billion to $290 billion, achieving a 140% growth. This data indicates that the demand for stablecoins has surpassed the speculative and trading realms of the crypto-native field, beginning to gain recognition as an independent asset class and financial tool in a broader market.

2. Explosive Core Application Scenario: Cross-Border Payments

The strongest manifestation of this growth is in the vertical field of cross-border payments. Two years ago, actual use cases for stablecoins in cross-border settlements were still in their infancy and almost negligible. According to the latest data, the current monthly settlement volume in this field has surpassed $60 billion. More notably, its growth slope—monthly growth rates of 20% to 30%—clearly demonstrates a steep adoption curve.

Despite the rapid growth, its market penetration remains in the very early stages. Compared to the current global traditional cross-border payment market, which reaches up to $200 trillion annually, the share of stablecoins remains insignificant, indicating that there is still enormous growth potential in the future, potentially by dozens or even hundreds of times.

3. Core Driving Force: "Currency Substitution" Demand in High-Inflation Economies

The accelerated adoption of stablecoins is driven by strong economic forces in the real world, particularly evident in emerging markets and high-inflation countries.

An in-depth analysis report from Cointelegraph in August pointed out that in countries like Venezuela, the sovereign currency (the Bolívar) has essentially lost its core function as a medium of daily commercial transactions due to hyperinflation. Harsh capital controls, a failing local banking system, and chaotic official exchange rates have collectively created a "scorched earth" financial environment. In this context, citizens and businesses actively seek currency substitutes, and dollar stablecoins, which offer ample liquidity and value stability, have proven to be far more reliable than cash or local bank transfers, becoming the market's spontaneously chosen "hard currency."

This phenomenon is not unique to Venezuela. Since the global inflation wave in 2022, several major economies, including Argentina, Nigeria, Turkey, and Brazil, have faced severe depreciation pressure on their national currencies, leading to a massive demand for value storage and payment hedging.

Venezuela ranks 18th globally in cryptocurrency adoption. Source: Chainalysis

According to Chainalysis data, Venezuela's cryptocurrency adoption rate ranks 18th globally. More compelling data shows that in 2024, 47% of small transactions under $10,000 in the country will be completed using stablecoins, making it the ninth largest country in terms of cryptocurrency adoption per capita. This is no longer a niche behavior; it is strong evidence that stablecoins have deeply embedded themselves in the socio-economic fabric.

More importantly, this adoption is gradually moving from the spontaneously "gray" areas of civil society to the officially recognized "sunshine" areas. In Brazil, stablecoins have been integrated into the national instant payment system PIX; in Argentina, using stablecoins to pay for large contracts such as rent has also gained legal recognition. These cases mark the evolution of stablecoin adoption from "bottom-up spontaneity" to "top-down confirmation."

Dollar Stablecoins: Three Strategic Pillars of U.S. National Interest

Since the regulatory framework represented by the "Genius Act" has clarified, the growth trajectory of dollar stablecoins has shown exponential acceleration, and its long-term potential has yet to hit a ceiling. This explosive growth is not just a market behavior but is deeply tied to the strategic interests at the national level in the U.S. From a macro perspective, the global expansion of dollar stablecoins can bring at least three strategic benefits to the U.S.:

1. Maintaining Dollar Hegemony: An Asymmetric Extension of Monetary Influence

Over the past decade, the global process of "de-dollarization" has been slow but steadily advancing, eroding the dollar's status as an international reserve and settlement currency over the long term. The rise of dollar stablecoins provides a new, asymmetric solution to reverse this trend.

Especially in the high-inflation countries mentioned earlier, the proliferation of dollar stablecoins essentially builds a parallel, dollar-pegged "digital dollarization" economy outside the financial systems of sovereign nations. It effectively bypasses these countries' capital controls and fragile fiat currency systems, allowing the dollar's value proposition to reach end-users directly. This not only avoids any traditional geopolitical or military means but also achieves deep monetary penetration into these economies, significantly expanding the actual coverage of the "dollar ecosystem" (traditional dollars + digital dollars), thereby consolidating the dollar's international position in a new dimension.

2. Alleviating Fiscal Pressure: Creating Structural Demand for U.S. Treasury Bonds

The second strategic pillar is to support the increasingly heavy government finances in the U.S., which is crucial. The stability of the U.S. Treasury bond market, particularly its yield levels, is a core concern of U.S. economic policy. This can be seen from the Trump administration's extreme sensitivity to fluctuations in the 10-year Treasury yield when dealing with tariff disputes; the Treasury bond market is the cornerstone of the U.S. macroeconomy.

The issuance mechanism of dollar stablecoins naturally creates a large and continuously growing source of demand for U.S. Treasury bonds. Although the reserves of stablecoin issuers are currently heavily allocated to U.S. Treasury bonds, as their total market capitalization further expands, their role as "major buyers of U.S. debt" will become increasingly significant. Citibank's analytical model predicts that by 2030, the potential long-term scale of the stablecoin market could reach $1.6 trillion. The model further indicates that there will be hundreds of billions of incremental U.S. Treasury demand, primarily from three sources: 1) the reallocation of globally circulating U.S. cash to digital forms (about $240 billion); 2) a partial reallocation of global central bank base money (M0) (about $109 billion); and 3) the reallocation of foreign-held U.S. dollar deposits to stablecoins (about $273 billion). This new purchasing power will play a significant positive role in stabilizing U.S. Treasury yields and reducing government financing costs.

3. Consolidating First-Mover Advantage: Leading Rule-Making in the Digital Asset Era

Finally, the U.S. is fully committed to ensuring its dominant position in the global crypto market, and dollar stablecoins are the core lever to achieve this goal. The regulatory shift from past suppression to current embrace—a 180-degree turn—clearly exposes the evolution of its strategic intentions. When decision-makers realized they could not completely stifle crypto technology, they quickly shifted to a strategy of "incorporation" and "utilization," aiming to bring this emerging field into their regulatory and economic framework through the establishment of a comprehensive legal framework.

This strategy is not unique to the U.S. but is a competition among major global economies. All countries and regions actively legislating for stablecoins ultimately aim to seize advantageous positions and share future dividends in this new financial technology race. By supporting dollar stablecoins, the U.S. aims to ensure that the underlying settlement standards of the future global digital economy remain firmly in its hands.

Current Status of Non-Dollar Stablecoins: Structural Dilemmas and Strategic Necessity

1. Extreme Centralization of Market Structure

Despite the strong expansion momentum of dollar stablecoins, a healthy global digital asset ecosystem should ideally exhibit a coexistence of multiple fiat currencies. However, real data reveals an extremely imbalanced picture: the market space for non-dollar stablecoins is being severely squeezed.

Market share of stablecoins supported by different fiat currencies Source: rwa.xyz

Data shows that this segment has experienced drastic shrinkage. In the early stages of market development in 2018, non-dollar stablecoins held a 48.98% market share, almost on par with dollar stablecoins (51.02%). However, today, their total market share has collapsed to just 0.18%. In absolute terms, the total market capitalization of non-dollar stablecoins is only $526 million, with euro stablecoins (at $456 million) dominating with nearly 88.7% of the absolute share. This indicates that beyond the dollar, no other fiat currency has been able to form effective market competitiveness in the stablecoin space.

2. Structural Risk: "Exchange Rate Tax" for Non-Dollar Zone Users

As the stablecoin market becomes increasingly intertwined with real-world economic activities, this "unipolar system" composed of dollar stablecoins poses potential structural risks for users in non-dollar zones (especially in developed economies with similarly low inflation). The core issue is that they are forced to bear unnecessary foreign exchange volatility risks while participating in the global crypto economy.

We can illustrate this issue through a typical user path:

Suppose a user in Tokyo purchases Ethereum (ETH) using Japanese yen (JPY) on the local compliant exchange bitFlyer. When she wishes to invest these assets into global DeFi protocols (such as lending on Aave or providing liquidity on Uniswap), she will find that the core liquidity pools of these mainstream protocols are almost entirely denominated in dollar stablecoins (USDC, USDT, etc.).

The concept of "yen balance" in her bitFlyer account cannot be directly transferred to the on-chain world. To participate in DeFi, she must hold a stable asset that is tokenized on-chain. In the absence of a sufficiently liquid and composable yen stablecoin, her only option is to exchange ETH for a dollar stablecoin. This operation adds an additional layer of JPY/USD exchange rate exposure to her investment portfolio. Regardless of whether she profits or loses in the future, when she eventually converts back to yen, she will have to bear the exchange rate fluctuations during that period, effectively being subjected to an invisible "exchange rate tax."

3. Systemic Risk and the Strategic Necessity for Diversification

From a more macro perspective, the entire liquidity lifeline of the current crypto economy is almost entirely dependent on dollar stablecoins, constituting a potential, highly concentrated systemic risk point. Any extreme regulation, technical failure, or monetary policy shock originating from the U.S. could have catastrophic impacts on global markets.

Therefore, promoting the development of high-quality stablecoins such as the euro, pound, and yen is far more significant than mere market competition. It serves as a "risk isolation wall" and a "systemic backup plan" for the global crypto economy. A diversified multi-fiat stablecoin ecosystem can effectively hedge against the risks associated with excessive reliance on a single national currency and regulatory system, enhancing the overall system's anti-fragility.

For major economies like the EU and Japan, promoting stablecoins regulated by their own financial systems and pegged to their own currencies is no longer merely a commercial act but a national strategic task to safeguard their "monetary sovereignty in the digital age." Although non-dollar stablecoins currently lag far behind dollar stablecoins in scale and liquidity, their logical foundation for existence is solid, and their development is an inevitable historical trend. Next, we will provide a specific introduction to the development of major non-dollar stablecoins.

Euro Stablecoin

Against the backdrop of the absolute dominance of the dollar in the global stablecoin market, the evolution path of euro stablecoins provides us with an excellent case study on how non-dollar currencies attempt to break through under regulatory drivers.

1. Two Stages of Market Evolution: From Early Exploration to Regulation-Driven Acceleration

The development of euro stablecoins can be clearly divided into two stages, marked by the EU's "Markets in Crypto-Assets Regulation" (MiCA):

1. Early Exploration Stage (Before MiCA): The hallmark project of this stage was the STASIS Euro (EURS) launched in 2018. As a market pioneer, EURS faced slow growth for a long time, with its market capitalization lingering between tens of millions to one hundred million euros. This reflects that in the absence of a clear regulatory framework and institutional demand, the market was limited to a few European crypto enthusiasts, failing to achieve economies of scale.
2. Accelerated Development Stage (Driven by MiCA): The introduction and gradual implementation of the MiCA regulation have been fundamental catalysts for changing the game. It provides market participants with unprecedented legal certainty, attracting formal entry from industry giants. Stablecoin issuers Circle (issuer of USDC) and Tether (issuer of USDT) have respectively launched Euro Coin (EURC) and Euro Tether (EURT). Notably, Circle has actively promoted its multi-chain deployment strategy, expanding EURC to multiple mainstream public chains such as Ethereum, Solana, and Avalanche in the 2023-2024 period as MiCA approached.

The results of this strategic transformation are evidenced by data: between 2023 and October 2025, the total market capitalization of euro stablecoins experienced rapid growth, currently reaching $456 million. Among them, Circle's EURC contributed the vast majority of the increment, achieving a 155% increase in market capitalization within 2025, growing from $117 million at the beginning of the year to $298 million. Although the absolute value still lags significantly behind dollar stablecoins, its growth rate shows a strong catching-up momentum.

2. Market Acceptance Assessment: Infrastructure Ready, Network Effects Lacking

• Integration with Exchanges and DeFi: Euro stablecoins have completed the basic infrastructure setup. All major exchanges, including Coinbase, Kraken, and Binance, have listed EURC or EURT and provided trading pairs with mainstream crypto assets. Meanwhile, leading DeFi protocols such as Aave, Uniswap, and Curve have also completed integration. Especially in protocols like Curve, which optimize stablecoin swaps, the liquidity scale of euro stablecoin pools is steadily increasing.
• Potential Application Scenarios: In the payment and remittance sectors, some Web3 payment applications and fintech companies have begun small-scale pilots, utilizing euro stablecoins for instant settlements and cross-border payments within the Eurozone.
• Core Barrier—Cognitive Gap: Despite the preliminary completion of infrastructure, euro stablecoins face a significant "cognitive gap" and "network effect deficit." In the mental models of the vast majority of global crypto users, the concept of "stablecoins" is almost synonymous with "dollar stablecoins," making it extremely challenging for euro stablecoins to acquire new users and liquidity.

3. Dual Dilemmas for Future Development

1. Potential Competition from Official Digital Euro (CBDC): The European Central Bank (ECB) is actively advancing research and development of a digital euro. Once a central bank-issued digital euro, which carries no credit risk, is launched, it will pose direct, asymmetric competition to privately issued euro stablecoins. At that point, the digital euro is likely to gain overwhelming advantages in regulatory status and application scenarios, squeezing the survival space of private stablecoins.
2. Business Model Challenges from Interest Rate Differences: This is a more fundamental economic constraint. The core profit of stablecoin issuers comes from the interest income on their reserve assets (mainly short-term government bonds). Historically, interest rates in the Eurozone have been lower than those in the U.S. This means that, at equal scales, the profitability of issuing euro stablecoins is inherently weaker than that of issuing dollar stablecoins. This difference in profitability directly limits the issuers' ability to promote DeFi protocol integration and user adoption through revenue sharing and liquidity incentives, creating a negative cycle that hinders their cold start and scale expansion.

Australian Dollar Stablecoin

The Australian dollar stablecoin market presents a development paradigm that is entirely different from that of the Eurozone. Although its public total market capitalization is about $20 million, ranking second among global non-dollar stablecoins, its most notable feature is the top-down exploration led by traditional banking institutions rather than crypto-native companies.

1. Market Dominant Force: Entry of Traditional Banks

The most notable stablecoin project in Australia comes from two giants among the "Big Four" banks—Australia and New Zealand Banking Group (ANZ) and National Australia Bank (NAB), which have respectively launched A$DC and AUDN. This phenomenon is extremely rare globally, marking a direct recognition of the potential value of stablecoin technology by the mainstream financial system. However, it is worth noting that these two bank-issued stablecoins are still primarily in the interbank settlement and internal pilot stages, not yet widely available to the public.

The supply of Australian dollar stablecoins aimed at the retail and crypto trading markets is mainly filled by third-party payment companies, with AUDD being a representative.

AUDD (by Novatti)

• Issuer Background: Novatti is a licensed payment service provider listed on the Australian Securities Exchange (ASX), with both compliance and fintech backgrounds.
• Target Audience: Its positioning is clear, primarily serving three types of users: cryptocurrency traders, individuals or businesses with cross-border remittance needs in AUD, and Web3 application developers.
• Technical Path: AUDD has chosen to issue on public chains known for payment efficiency, such as Stellar, Ripple, and Algorand, rather than Ethereum, reflecting its strategic focus on payments and settlements.
• Market Position: Currently, AUDD is the most accessible and usable Australian dollar stablecoin for retail users.

2. Core Development Dilemma: Dual Uncertainty from Regulation and Official CBDC

1. Lack of Regulatory Framework: Unlike the EU, which has fully implemented the MiCA regulation, Australia has yet to establish a comprehensive and clear legal framework for stablecoins by October 2025. This regulatory lag constitutes the biggest bottleneck for market development. Even strong banks like ANZ and NAB can only explore on a small scale, unable to promote products to the public without clear regulatory definitions. This greatly limits the development speed and scale of the entire Australian dollar stablecoin ecosystem.
2. Potential Competition from Official Digital Australian Dollar (CBDC): The Reserve Bank of Australia (RBA) has maintained a positive attitude towards issuing an official CBDC and has recently successfully completed related pilot projects. This progress brings a second layer of uncertainty to the market. If the RBA decides to formally issue a digital Australian dollar in the future, as a "ultimate risk-free asset" directly liability of the central bank, it will form direct competition with stablecoins issued by commercial banks or private institutions. At that point, it remains unclear whether the two will coexist complementarily or compete as substitutes.

Korean Won Stablecoin

The Korean market presents us with a unique paradox: as a country with a high acceptance of crypto assets, it lacks the "soil" for stablecoin growth. This is in stark contrast to the bottom-up adoption driven by civil society in high-inflation countries. The fundamental reason lies in the highly developed fintech and instant payment systems in Korea, which have already met the daily needs of the vast majority of users, thereby weakening the "intrinsic motivation" of stablecoins as a payment alternative.

Therefore, for the Korean won stablecoin to gain market adoption, the only feasible path is a "top-down" strategic push led by large institutions. This may include the following scenarios:

• Led by the government or tech giants like Naver and Kakao, seamlessly integrating it into existing payment or remittance backends.
• Promoted by mainstream exchanges, replacing physical won as the core trading medium with the won stablecoin.
• Introduced by platforms offering innovative incentives or micropayment functions based on stablecoins.

However, before these scenarios can be realized, the market faces a series of deep structural barriers.

1. Core Dilemma of Development: Legislative Vacuum and Corporate Caution

The current main bottleneck is severe legislative lag. Although the Korean National Assembly has five related bills pending, the legislative process is extremely slow. According to current (October 2025) progress predictions, even if the Financial Services Commission (FSC) submits a government proposal on time, the relevant laws may not officially take effect until early 2027. Before that, no company can legally and on a large scale conduct stablecoin business within the legal framework.

This regulatory uncertainty directly leads to a division and general caution among Korean enterprises:

• Small Enterprises: Show a willingness to participate actively, but their activities are more for public relations effects and market voice, generally lacking the capital, compliance, and technical capabilities needed for large-scale stablecoin operations.
• Large Enterprises (Chaebols): Generally adopt an extremely cautious "hold and wait" strategy. Their core considerations are twofold: first, the legal risks are too high; second, they assess that in a highly competitive domestic market, the actual commercial returns from shifting to blockchain technology are insufficient to attract their investment of substantial resources.

Currently, all activities surrounding the Korean won stablecoin remain at the surface level of theoretical discussions and trademark applications.

2. Four Structural Barriers

In summary, the dilemmas faced by the Korean won stablecoin can be attributed to four interrelated structural barriers:

1. Technical Route Dispute: Private Chain vs. Public Chain: The Bank of Korea and regulatory bodies like the FSC strongly prefer to conduct the first issuance of stablecoins on a "Korean-style customized private chain" for risk controllability. However, this idea is widely regarded in the industry as "disappointing." It not only contradicts the core values of blockchain openness, permissionless access, and interoperability but may also lead to the further fragmentation of the Korean financial system into multiple disconnected private networks, creating inefficient "walled gardens."
2. Dual Constraints of Reserve Asset Market: Scarcity and Low Yield: The business model of stablecoins is rooted in reserve assets. Korea faces a dual dilemma here: first, its domestic financial market lacks short-term government bonds with maturities of less than one year, which means the most ideal and safest category of reserve assets is missing. Second, even alternative assets like currency-stable bonds lack the market scale and liquidity to support large-scale stablecoin issuance. More critically, the yield of about 2% in the Korean bond market is far below the approximately 4% level in the U.S., which greatly weakens the operational profitability of issuers in the stablecoin business, making it commercially unattractive.
3. Technical Misunderstanding of Public Chain Regulation: The prevailing view among the Korean government that "public chain risks are too high and difficult to regulate" is, to some extent, a misunderstanding of existing technology. In fact, through well-designed smart contracts, effective regulation and compliance control over user identity verification (KYC) and fund flows can be achieved on open public chains.
4. Collective Lack of Vision and Urgency: The fundamental issue is that from the government to financial institutions and large enterprises, no key participant has proposed a clear goal or a specific plan for the future of the Korean won stablecoin. The entire market is trapped in a state of "collective waiting," leading to a strategic stagnation. However, the evolution of global blockchain finance will not wait for any latecomers. If Korea waits until 2027 to launch its stablecoin on a closed private chain, it will find itself far behind the world.

Hong Kong Dollar Stablecoin

The development path of stablecoins in Hong Kong presents a complex picture shaped by clear local regulations, active market participation, and cautious regulatory forces from the mainland. Currently, Hong Kong is at a critical turning point, transitioning from an initial overheating phase to a new stage of "localized cooling" and structural differentiation.

Despite market fluctuations, the official stance in Hong Kong remains firm. The Secretary for Financial Services and the Treasury, Christopher Hui, has publicly stated that the application process for compliant stablecoin licenses is progressing according to the established framework, with the first batch of licenses expected to be issued as scheduled in early 2026.

1. Hong Kong's Active Layout and Initial Overheating of the Market

Hong Kong's strategic goal to become a leading global virtual asset center is very clear. To this end, the Hong Kong government has taken a series of proactive and clearly paced measures:

• March 2024: Launched a "sandbox" for stablecoin issuers, providing a regulated testing environment for the market.
• August 1, 2025: Officially implemented the "Stablecoin Ordinance," establishing the world's first comprehensive and clear regulatory legal framework for stablecoins.

This leading regulatory certainty has greatly stimulated market enthusiasm, attracting over 77 companies to express their intention to apply, leading to a state of "overheating" in this sector. However, the influx of many financial institutions with mainland Chinese backgrounds has raised cautious concerns among mainland regulatory authorities.

2. Cautious Intervention by Mainland Regulators

The recent "window guidance" from mainland regulatory authorities to relevant Chinese institutions is not aimed at stifling innovation but is based on the following considerations:

1. Risk Isolation: Ensuring that the potential risks of Hong Kong's virtual asset businesses do not transmit back to the mainland's large and strictly regulated financial system through equity relationships.
2. Capital Control: Preventing mainland funds from flowing into Hong Kong's virtual asset market through non-compliant channels.
3. Market Order: Requiring Chinese institutions to maintain a low profile, avoiding excessive publicity or creating media hotspots to prevent irrational overheating in the market.

The tension between "Hong Kong's global ambition" and "mainland financial prudence" is the core context for understanding the current dynamics of the Hong Kong dollar stablecoin market.

3. Current Market Situation: Localized Cooling, Slowed Expectations, Structural Differentiation

The intervention of mainland regulators has had an immediate impact on the market, and the current situation can be summarized as follows:

• First Batch of Exits: Before the official application deadline on September 30, at least four Chinese-backed financial institutions, including Guotai Junan International, have publicly announced their withdrawal from the stablecoin license application or have postponed their RWA-related businesses. Market expectations suggest that some originally proactive Chinese banks (such as Bank of China Hong Kong) may also delay their application processes.
• Strategy Shift to "Doable but Not Speakable": The guidance from mainland regulators is not a complete ban but a request to "keep a low profile." This forces Chinese institutions to shift their strategy from high-profile entry to more cautious internal research and quiet layout.
• Market Structural Differentiation: This round of "cooling" is localized and asymmetric. The affected entities are highly concentrated among institutions with Chinese backgrounds. Meanwhile, local Hong Kong and other international financial institutions continue to advance their virtual asset businesses in an orderly manner within the existing legal framework.
• License Issuance Rhythm Expectations: The market generally expects that the first batch of licenses will follow a cautious rhythm similar to that of VASP exchange licenses, issuing only a very limited number (possibly just one or two) of licenses by the end of 2025 or early 2026, with subsequent gradual relaxation based on market development.

4. Strategic Dilemmas Facing Hong Kong Dollar Stablecoins

1. Uncertainty Under Mainland Regulatory Influence: This is the current core dilemma. Chinese institutions are an indispensable part of the Hong Kong financial market, and their collective "pause" or "low profile" will undoubtedly affect the market scale, liquidity depth, and application breadth of the Hong Kong dollar stablecoin in its early issuance phase. The Hong Kong authorities need to seek a delicate dynamic balance between promoting market openness and responding to mainland regulatory concerns.
2. Contradiction Between Development Rhythm and Global Competition: Compared to the "full warming" of the U.S. market, Hong Kong has adopted a more "restrained and cautious" development pace under mainland influence. While this prudent rhythm helps control risks, it also puts it at risk of missing the time window and falling behind competitors in the global financial innovation race.
3. Risk and Dividend Trade-offs: The intervention of mainland regulators essentially forces Chinese institutions to reassess the risk-return ratio of being "first movers." While early entrants can enjoy the maximum policy dividends and first-mover advantages, they must also bear the highest costs of market and compliance trial and error.

Japanese Yen Stablecoin

The development path of stablecoins in Japan is a carefully designed financial infrastructure innovation driven by the government from the top down, set against its unique macroeconomic background. The core driving force does not stem from speculative demand from the public but from the urgent need to address long-standing structural economic dilemmas such as "low interest rates, low growth, and deflationary pressures." Stablecoins are seen as a policy tool capable of enhancing financial efficiency, revitalizing capital flows, and injecting new momentum into the weak domestic payment system and illiquid government bond market.

To this end, the Japanese government has established one of the world's most rigorous regulatory frameworks for stablecoins through a series of legislations such as the "Amendment to the Payment Services Act." Its strategic intent is crystal clear: to transform stablecoins from mere "crypto assets" into "financial infrastructure" serving national strategies.

1. From Theory to Practice: The Launch of the First Compliant Product

Currently, the Japanese stablecoin market has officially transitioned from the "theoretical preparation phase" to the "commercial practice phase."

• Significant Event: The fintech startup JPYC Inc. has received regulatory approval to issue the first fully compliant yen stablecoin, "JPYC," in the fall of 2025.
• Key Cooperation Model: This issuance reveals the entry model of the Japanese market—"the technological innovation of startups (JPYC Inc.) + the compliance infrastructure of giant platforms (Mitsubishi UFJ Trust Bank's Progmat Coin)." This indicates that regulators are open to innovation, provided it is anchored within the strong compliance framework of licensed financial institutions.
• Technical Path and Business Ambition: "JPYC" plans to issue on multiple mainstream public chains such as Ethereum and Avalanche, reflecting its pursuit of openness and composability under compliance. Its goal of "issuing 1 trillion yen within three years" and attracting A-round investments from international giants like Circle demonstrate its strong determination to capture the market.

The positioning of JPYC is not to replace fiat currency but to serve as "on-chain yen," becoming a bridge that seamlessly extends the functions and value of yen into the global digital economy.

2. Core Application Scenarios

1. International Remittances and Corporate Settlements: Providing near-real-time, low-cost payment solutions for students studying abroad, cross-border e-commerce, and simplifying B2B payment processes and cross-border fund management using smart contracts.
2. Building a Local Web3 Ecosystem: As an on-chain "native liquidity carrier" denominated in yen, it provides a stable value medium for Japan's vast gaming, NFT, and other Web3 applications, constructing its underlying financial infrastructure.

3. Multi-Layered National Strategic Intent

The launch of the yen stablecoin carries Japan's multi-layered strategic considerations:

1. Defensive Strategy: Competing for Digital Currency Sovereignty: This is the most core initiative. By launching a compliant yen stablecoin, Japan aims to break the monopoly of dollar stablecoins in the digital world, providing a non-dollar option for Japan's cross-border trade and international settlements, thereby reducing dependence on traditional systems like SWIFT.
2. Economic Strategy: Activating the Government Bond Market and Innovating Monetary Policy Tools: This is a clever design that achieves "two birds with one stone." By mandating a significant allocation of reserve assets to Japanese government bonds (JGBs), it not only creates a new structural buyer for the long-demand-deficient bond market, helping to lower government financing costs; in the longer term, the central bank may even adjust the reserve requirements of stablecoins to use them as a new monetary policy tool for regulating market liquidity.
3. Development Strategy: Promoting Financial Infrastructure Upgrades: The approval of JPYC will act as a "catalyst" within Japan's conservative financial system, activating the innovative vitality of local giants like Sony and Mizuho, modernizing the domestic payment system, and safely connecting Japan's financial system to the global Web3 ecosystem in a highly compliant manner, avoiding falling behind in the next wave of digital finance.

4. Challenges and the Demonstrative Effect of the "Japanese Model"

• Business Model Challenges: In a zero-interest-rate environment, the traditional profit model based on interest from reserve assets has completely failed. This requires issuers to rapidly achieve a massive issuance scale to maintain operations through "thin profit margins."
• Extreme Risk Control Framework:
• Legal Definition: Strictly defining stablecoins as "electronic payment tools," fundamentally stripping away their speculative attributes.
• Subject Limitation: Limiting issuers to licensed financial institutions such as banks and trust companies.
• Unique "Asset Sufficiency Clause": Mandating that issuers must use their own capital to cover any shortfall when reserve assets depreciate. This is a strong constraint not seen in European and American regulations, greatly ensuring the safety of user assets.
• Mandatory Anti-Money Laundering/KYC Reviews.

In summary, Japan's pioneering "trust-based," "strongly regulated," and "semi-centralized" stablecoin model achieves extreme safety and compliance. It provides a highly valuable reference for other Asian economies, such as Hong Kong and South Korea, that also prioritize financial stability, and may lead the entire East Asian region to form a new regulatory consensus on "compliant stablecoins."

About Movemaker

Movemaker is the first official community organization authorized by the Aptos Foundation, jointly initiated by Ankaa and BlockBooster, focusing on promoting the construction and development of the Aptos ecosystem in the Chinese-speaking region. As the official representative of Aptos in the Chinese-speaking area, Movemaker is committed to building a diverse, open, and prosperous Aptos ecosystem by connecting developers, users, capital, and numerous ecological partners.

Disclaimer:

This article/blog is for reference only, representing the author's personal views and not the position of Movemaker. This article does not intend to provide: (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets, including stablecoins and NFTs, carries high risks, with significant price volatility, and they may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. For specific issues, please consult your legal, tax, or investment advisor. The information provided in this article (including market data and statistics, if any) is for general reference only. Reasonable care has been taken in compiling these data and charts, but no responsibility is accepted for any factual errors or omissions expressed therein.