Japanese and South Korean regulators, banks, and crypto firms spent 2025 building infrastructure for yen and won-pegged stablecoins, challenging the dominance of dollar-backed tokens despite USDT and USDC maintaining overwhelming market share. The strategic shift aims to ensure domestic financial systems remain relevant as transaction activity migrates on-chain. Japanese fintech company JPYC launched what it described as the country’s first legally recognized yen-backed stablecoin in October. Japan’s three megabanks, MUFG, SMBC, and Mizuho, initiated pilots spanning payments, interbank settlement, and institutional financial services using stablecoins and tokenized deposits.
The Financial Services Agency officially announced support for the megabank pilot project in December. SBI Holdings separately unveiled plans to collaborate with blockchain firm Startale on stablecoin issuance and supporting infrastructure for the Japanese market. South Korea witnessed a surge in won-pegged initiatives throughout the year. Crypto custody firm BDACS launched KRW1 on Avalanche in September, positioning the token for global use in remittances and payments, while KRWQ debuted on Coinbase’s Base network in October.
KakaoBank advanced its won-pegged stablecoin initiative to actual development stages as Korean issuers experimented across multiple blockchain ecosystems. South Korea has yet to introduce formal stablecoin regulations, though authorities indicated efforts are underway to establish comprehensive frameworks. Angela Ang, head of policy and strategic partnerships for APAC at TRM Labs, explained that policymakers are encouraging local currency stablecoin issuance to prevent domestic financial systems from falling behind as activity shifts on-chain. Tim Sun, senior researcher at HashKey Group, noted that Japan has watched the yen weaken for years and views stablecoins as an opportunity to rebuild the currency’s role in a digital-first economy.
A yen stablecoin could prove particularly valuable for cross-border payments and settlement operations. Eddie Xin, head of research at OSL Research, identified Japan’s JPYC, offshore yuan stablecoin AxCNH, and Korea’s KRW1 as the most notable non-dollar launches designed explicitly as payment and settlement infrastructure. Market gravity continues to bend toward dollars, and that dynamic will not change overnight despite regional positioning efforts, he said. Chen Wu, CEO of Hong Kong-licensed crypto firm EX.IO, stated bluntly that most non-dollar stablecoins launched in Asia do not matter because their underlying currencies lack significance in global trade.
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