The story most commonly told about stablecoins runs in one direction, i.e., they solve cross-border payment friction, settling in seconds, whereas correspondent banking takes days. Furthermore, they reduce transaction costs in corridors where traditional infrastructure is expensive, all while providing access to dollar-denominated financial instruments for populations outside the US.
The volumes support this framing, given stablecoin transfer volumes reached $33 trillion by Q4 2025. But there seems to be a parallel story quietly accumulating evidence behind the scenes, which is what happens when a compliant, regulated stablecoin pegged to a local currency enters a domestic economy on its own terms.
Japan, and the yen-denominated JPYSC stablecoin launched through a partnership between SBI Holdings and Startale Group in early 2026, offers a useful lens for examining why the domestic opportunity may ultimately be larger than any cross-border one.
The 99% problem
The starting point for understanding why domestic stablecoins matter is the composition of the market itself, because as of early 2026, over 99% of all stablecoins in circulation are pegged to the USD. Tether and Circle’s USDC alone account for roughly 93% of the total stablecoin market capitalization that now exceeds $320 billion. For any economy that doesn’t transact primarily in dollars, that figure means transacting in a foreign currency.
The regulatory catalysts that have begun to change this are quite apparent because, as soon as the EU’s MiCA regulation took effect at the end of 2024, non-USD stablecoin activity briefly exceeded $40 billion but has since stabilized at a persistently higher baseline than pre-MiCA, running at around $15 to $25 billion per month.
The Brazilian real-backed stablecoin BRLA, too, has grown from near zero in early 2023 to roughly $400 million per month by early 2026, almost entirely through domestic use cases rather than cross-border ones. And, while these data points are still quite nascent, they do signal genuine demand for local currency-denominated stablecoins.
Japan’s digital payment inflection point
Japan is at a specific and well-documented inflection point in its own cashless transition as the country’s cashless payment ratio reached approximately 42% in 2025, with the government targeting 80% by 2030. Bridging this number is not primarily a technology problem, as the payment infrastructure for digital transactions has existed in Japan for years.
The issue, to a significant degree, is a trust problem given that Japanese consumers are accustomed to instruments that operate within a clearly defined regulatory framework, and digital payment adoption has moved fastest where that framework has been clear.
Amid this, JPYSC has emerged as one of the clearest regulated yen-stablecoin initiatives. It is being jointly developed by SBI Holdings and Startale Group, with issuance planned through Shinsei Trust & Banking and distribution through SBI VC Trade. That trust-bank structure places the instrument inside Japan’s domestic electronic payment instrument framework rather than in an offshore or loosely supervised yen-token model.
Unlike offshore yen-pegged tokens that have circulated in various forms, JPYSC is designed to sit within a defined Japanese legal perimeter. For Japanese businesses, that means yen-denominated onchain settlement would be routed through a domestic, regulated financial architecture rather than through an offshore stablecoin issuer.
JPYSC’s cross-border capabilities are genuine and form part of its intended use-case set, including yen-denominated settlement for international counterparties, corporate treasury operations, high-volume transactions, tokenized asset settlement, and future AI-agent payment flows as that market develops.
But the domestic applications may be where the clearest volume potential lies. SBI’s broader ecosystem includes more than 14 million securities accounts, and its partnership with Startale is aimed at tokenized securities and RWA infrastructure. If JPYSC becomes the yen settlement layer for that environment, it would likely be positioned less as a speculative cryptocurrency product and more as a familiar yen-denominated financial infrastructure operating onchain. The instrument is familiar; the settlement layer beneath it is new and, for many users, potentially invisible.
This aspect alone matters more than it might initially appear because when a stablecoin is issued by a licensed trust bank under domestic law, the user doesn’t need to independently evaluate the issuer’s reserve transparency or decide whether to trust an offshore entity operating under a foreign jurisdiction’s rules.
The regulatory framework they already rely on has already made that determination. The resulting trust in the instrument isn’t crypto-native but institutional, one that has been transferred from a familiar domain into a new infrastructure layer.
Featured image via Shutterstock.
