Founded: 2021
The Japanese yen is being digitized on the blockchain. Operated by JPYC Inc., the stablecoin aims to better integrate Japan into the digital asset market and open it up to international transfers. A stablecoin is the blockchain equivalent of a fiat currency. Fiat currencies aren't small Italian cars, but rather the technical term for national currencies like the euro, the dollar, the British pound, or, in this case, the Japanese yen. JPYC therefore always represents the exact value of one yen on the blockchain.
While the major US dollar-based stablecoins are used for the general applicability and trading of cryptocurrencies, JPYC represents a growing, yet still largely niche, market: local stablecoins. An increasing number of smaller, individual stablecoins are bringing local and often small currencies to the blockchain. The underlying idea is either, as with JPYC, to improve the handling of crypto investments within one's own country, or, on the other hand, to enable the integration of the respective countries into decentralized financial systems. Trading cryptocurrencies inevitably requires another currency into which they can be "exchanged." Traditionally, this is the US dollar. For users who have the US dollar as their own currency, this is a very convenient process, but for all other users worldwide, it involves an additional currency exchange into their own national currency, which costs money and carries exchange rate risk. With a local stablecoin, customers will be able to buy their cryptocurrencies directly with, for example, the yen, and also sell them directly with the yen.
For the integration of, or access to, decentralized financial systems, a stablecoin denominated in the respective national currency is almost more relevant than for trading cryptocurrencies. While pure currency trading operates solely within the blockchain ecosystem, financial systems must be integrable into the respective economic cycles and businesses. Therefore, anyone who doesn't want to trade in dollars needs their own national currency on the blockchain. For both use cases, however, 100% reserve coverage and the associated audits are essential. An audit by an independent company further confirms the accuracy of the statements regarding the reserve amounts. Without the permanent guarantee of converting the digital currency on the blockchain into "real" currency in a bank account, a stablecoin is unusable and fails to achieve the necessary trust. This is precisely where many projects from developing countries often fail, as they may be technically capable of launching a stablecoin, but fall far short of meeting the regulatory standards of the Western financial world.
With a market capitalization of around 14 million euros, JPYC is one of the smaller stablecoins and cryptocurrencies, but with over 1000 transactions every day, it has quite a few regular users.
