In short
Japan’s upcoming yen-denominated stablecoin and how it could affect global payments and finance, alongside a comparison to CBDCs.
Guest backgrounds
No guests are mentioned; host is Mia Nagasaka, Head of Japan Financials Research at Morgan Stanley MEFG Securities.
Key claims
Japan amended Payment Service Acts in June 2023 to enable a regulated stablecoin framework; stablecoins aim to reduce volatility versus Bitcoin; Japan’s rules require 100% backing by high-quality liquid assets and ban algorithmic stablecoins, with transparency, reserve requirements, and monthly audits.
Notable examples
instant settlement for stock/bond trades (days to seconds); SWIFT-like international transfers potentially completed in seconds with up to 80% lower fees; possible uses in asset management, lending, and “banking as a service.” CBDCs may coexist with stablecoins.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOUnderstanding Japan's Stablecoin
0:26 to 2:17
Exploration of Japan's stablecoin and its implications for digital finance.
“Japan may be late to the crypto market, but its first yen-denominated stablecoin is just around the corner, and it has the potential to quietly reshape how digital money moves across the country and globally.”
Regulatory Landscape and Future Prospects
2:17 to 4:24
Discussion on the regulatory environment and future of stablecoins in Japan.
“stable coins must be 100 % backed by high-quality, liquid assets, and algorithmic stable coins are prohibited.”
Conclusion on Japan's Stablecoin Impact
4:24 to 4:37
Summary of the potential impact of Japan's stablecoin on global finance.
“Japan's stablecoin journey is just the beginning, but its impact could ripple across payments, asset management, and even global finance.”
Transcript
Automatic transcript. May contain errors.0:00In case you missed it, today we're bringing you a special encore release of a recent episode. We'll be back on Monday with a brand new episode.
0:08Mia Nagasaka:Welcome to Thoughts on the Market. I'm Mia Nagasaka, Head of Japan Financials Research at Morgan Stanley MEFG Securities. Today, Japan's stablecoin revolution and why it matters to global investors. It's Friday, October 31st at 4 p.m. in Tokyo. Japan may be late to the crypto market, but its first yen-denominated stablecoin is just around the corner, and it has the potential to quietly reshape how digital money moves across the country and globally. You may have heard of digital money like Bitcoin. It's significantly more volatile than traditional financial assets like stocks and bonds. Stablecoins are different.
0:53They are a
0:54Mia Nagasaka:digital currency designed to maintain a stable value by being pegged to assets such as a yen or U.S. dollar. And in June 2023, Japan amended its Payment Service Acts to create a legal framework for stablecoins. Market participants in Japan and abroad are watching closely whether the Japan-yen stablecoin can establish itself as a major global digital currency, such as Tether. Stablecoins promise to make payments faster, cheaper, and available 24-7. Japan's cash-led payment ratio jumped from about 30 % in 2020 to 43 % in 2024, and there's still room to grow compared to other countries. The government's push for fintech and digital payment is accelerating, and stablecoins could be the missing link to a truly digital economy.
1:50Mia Nagasaka:Unlike Bitcoin or other cryptocurrencies, stablecoins are designed to suppress price volatility. They're managed by private companies and backed by assets. Think cash, government bonds, or even commodities like gold. Industry watchers think stablecoins can make digital payments as reliable as cash, but with the speed and flexibility of the internet. Japan's regulatory approach is strict. stable coins must be 100 % backed by high-quality, liquid assets, and algorithmic stable coins are prohibited. Issues must meet transparency and reserve requirements, and monthly audits are standard. This is similar to new rules in the US, EU, and Hong Kong.
2:40Mia Nagasaka:What does this mean in practice? Financial institutions are exploring stablecoins for instant payments, asset management, and lending. For example, real-time settlement of stock and bond trades normally take days. These transactions could happen in seconds with stablecoins. They also enable new business models like banking as a service and Web3 integration, although regulatory costs and low interest rates remain hurdles for profitability. Or think about SWIFT transactions, the backbone of international payments. Stablecoins will not replace SWIFT, but they can supplement it. Payment that used to take days can now be completed in seconds with up to 80 % lower fees.
3:27Mia Nagasaka:But trust and issuers in compliance with anti-money laundering rules are critical. There's another topic on top of investors' minds, CBDCs, the central bank digital currencies. Both stablecoins and CBDCs are digital, but digital currencies are issued by central banks and considered legal tender, whereas stablecoins are private sector innovations. Japan is the world's fourth largest economy and considered a leader in technology, but it takes a cautious approach to financial transformation. It is preparing for a CBDC, but hasn't committed to launching one yet. If and when that happens, stablecoins and CBDCs can coexist, with the digital currency serving as public infrastructure and stablecoins driving innovation.
4:24Mia Nagasaka:So what's the bottom line? Japan's stablecoin journey is just the beginning, but its impact could ripple across payments, asset management, and even global finance. Thanks for listening. If you enjoyed the show, please leave us a review wherever you listen and share thoughts on the market with a friend or colleague today. The preceding content is informational only and based on information available when created. It is not an offer or solicitation, nor is it tax or legal advice. It does not consider your financial circumstances and objectives and may not be suitable for you.
From the publisher
Original Release Date: October 31, 2025
Our Japan Financials Analyst Mia Nagasaka discusses how the country’s new stablecoin regulations and digital payments are set to transform the flow of money not only locally, but globally.
Read more insights from Morgan Stanley.
----- Transcript -----
Welcome to Thoughts on the Market. I’m Mia Nagasaka, Head of Japan Financials Research at Morgan Stanley MUFG Securities.
Today – Japan’s stablecoin revolution and why it matters to global investors.
It’s Friday, October 31st, at 4pm in Tokyo.
Japan may be late to the crypto market. But its first yen-denominated stablecoin is just around the corner. And it has the potential to quietly reshape how digital money moves across the country and globally.
You may have heard of digital money like Bitcoin. It’s significantly more volatile than traditional financial assets like stocks and bonds. Stablecoins are different. They are digital currencies designed to maintain a stable value by being pegged to assets such as the yen or U.S. dollar.
And in June 2023, Japan amended its Payment Services Acts to create a legal framework for stablecoins. Market participants in Japan and abroad are watching closely whether the JPY stablecoin can establish itself as a major global digital currency, such as Tether.
Stablecoins promise to make payments faster, cheaper, and available 24/7. Japan’s cashless payment ratio jumped from about 30 percent in 2020 to 43 percent in 2024, and there’s still room to grow compared to other countries. The government’s push for fintech and digital payments is accelerating, and stablecoins could be the missing link to a truly digital economy.
Unlike Bitcoin or other cryptocurrencies, stablecoins are designed to suppress price volatility. They’re managed by private companies and backed by assets—think cash, government bonds, or even commodities like gold. Industry watchers think stablecoins can make digital payments as reliable as cash, but with the speed and flexibility of the internet.
Japan’s regulatory approach is strict: stablecoins must be 100 percent backed by high-quality, liquid assets, and algorithmic stablecoins are prohibited. Issuers must meet transparency and reserve requirements, and monthly audits are standard. This is similar to new rules in the U.S., EU, and Hong Kong.
What does this mean in practice? Financial institutions are exploring stablecoins for instant payments, asset management, and lending. For example, real-time settlement of stock and bond trades normally take days. These transactions could happen in seconds with stablecoins. They also enable new business models like Banking-as-a-Service and Web3 integration, although regulatory costs and low interest rates remain hurdles for profitability.
Or think about SWIFT transactions, the backbone of international payments. Stablecoins will not replace SWIFT, but they can supplement it. Payments that used to take days can now be completed in seconds, with up to 80 percent lower fees. But trust in issuers and compliance with anti-money laundering rules are critical.
There’s another topic on top of investors’ minds. CBDCs – Central Bank Digital Currencies. Both stablecoins and CBDCs are digital. But digital currencies are issued by central banks and considered legal tender, whereas stablecoins are private-sector innovations.
Japan is the world’s fourth-largest economy and considered a leader in technology. But it takes a cautious approach to financial transformation. It is preparing for a CBDC but hasn’t committed to launching one yet. If and when that happens, stablecoins and CBDCs can coexist, with the digital currency serving as public infrastructure and stablecoins driving innovation.
So, what’s the bottom line? Japan’s stablecoin journey is just beginning, but its impact could ripple across payments, asset management, and even global finance.
Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.