Tokyo-based fintech firm JPYC Inc., the first domestic issuer of yen-denominated stablecoins in Japan, has disclosed plans that could transform the dynamics of the country’s government-bond market and the policy grip of the Bank of Japan (BoJ), Channel News Asia (CNA) reports.

JPYC began its issuance of the stablecoin, also branded “JPYC”, on October 27. Already it has issued approximately JPY143mn and onboarded about 4,707 account-holders as of November 12 Investing.com says.

The company has set an ambitious target of issuing up to JPY10 trillion ($66bn) over the next three years, CNA adds.

According to the firm's chief executive, Noritaka Okabe, the broader ambition is to ensure the yen has a meaningful presence in the rapidly expanding global stablecoin market, currently almost entirely dominated by US-dollar-pegged coins.

JPYC emphasises that its stablecoin is fully convertible to the yen and backed by domestic savings deposits and Japanese government bonds (JGBs). The company intends to allocate 80% of issuance proceeds into JGBs, with the remaining 20% held in bank savings.

The BoJ currently owns roughly 50% of the JPY1,055 trillion JGB market, but has begun slowing its purchases as it moves away from ultra-loose policy settings, CNA says. As such, there remains uncertainty over whether domestic financial institutions - many of which reduced their holdings under years of stimulus - will step up to fill the gap. To this end, while JPYC’s current issuance remains modest relative to the JGB market and the global stablecoin universe (estimated at some $290bn), its target is nonetheless substantial.