Japan & South Korea Charge Ahead: Stablecoin Regulations Take Center Stage in 2025

Asia's crypto powerhouses just dropped the regulatory hammer.

Japan's FSA and South Korea's FSC are racing to finalize stablecoin frameworks—while Wall Street still debates definitions. Here's what's moving markets:

The 24-Month Overnight Success

Two years after Terra's collapse, regulators aren't taking chances. Japan's new rules mandate 1:1 reserves and strict issuer licensing. South Korea's drafting similar laws—with extra AML teeth.

Institutional Money Loves Rules

Exchanges report surging stablecoin volumes as clarity emerges. Traders pivot from "wild west" altcoins to regulated dollar-pegs. (Because nothing says "safe haven" like crypto-backed IOUs.)

The Cynic's Corner

Watch banks suddenly "discover" stablecoin potential now that regulators did their homework. How revolutionary—financial innovation via regulatory rubber-stamping.

One thing's clear: When Asia moves, crypto markets listen. The question is who follows next—and whether they'll keep pace.

Japan eyes first yen-backed stablecoin

In Japan, the Financial Services Agency (FSA) is reviewing plans for a yen-pegged stablecoin for cross-border payments, corporate transactions, and DeFi.

Tokyo-based fintech firm JPYC is spearheading this project. The firm intends to register as a money transfer operator in August and launch token sales soon after.

According to reports, JPYC plans to support the stablecoin with liquid assets, including bank deposits and government securities, to ensure it stays closely tied to the yen. The company aims to issue roughly 1 trillion yen (around $6.78 billion) over three years.

Additionally, the token will be made available to individual users, businesses, and institutional investors, offering a regulated alternative for various financial activities.

South Korea prepares stablecoin legislation

On the other hand, South Korea’s Financial Services Commission (FSC) is reportedly expected to submit a stablecoin regulation bill to the National Assembly by October.

Lawmaker Park Min-Kyu has confirmed that legislators have already received briefings on the framework. Once passed, the legislation will define requirements for issuing stablecoins, managing collateral, and maintaining internal risk procedures.

The proposed rules are part of South Korea’s broad effort to regulate digital assets. Industry observers note that local banks are already preparing to enter the market once a clear legal framework is established, signaling strong institutional interest.

Meanwhile, Japan and South Korea’s efforts are part of a global trend of regulatory frameworks being introduced in major economies like the US, Europe, and Hong Kong to oversee tokens in this fast-rising sector of the crypto industry.